The cooling local and national homes market is taking a chunk out of home-appreciation rates, but in the Washington area they remain on an upward trajectory.
The median sales price for properties that went to closing across the Washington area in July was $562,766, up 2.3 percent but representing the lowest year-over-year price gain since June 2020.
That’s according to data from MarketStats by ShowingTime based on listing activity from Bright MLS.
Affordability issues and rising interest rates have priced some potential buyers out of the market, while general economic anxiety may have pushed others to the sidelines. The result: Fewer prospective buyers, fewer offers on homes, and some buyers willing to accept less than they otherwise might in order to move the property.
In the 10 jurisdictions that comprise the reporting area, eight saw higher year-over-year median prices, with Alexandria posting a big drop (which could be as much attributable to the types of housing in the overall sales mix during the month than a general freefall in prices). The District of Columbia’s median sales price was down slightly but effectively unchanged.
Bright MLS also watches home-sales indicators in Philadelphia and Baltimore, and its chief economist, Lisa Sturtevant, said there have been differences among the three metro areas in recent months.
“Home-sales activity began declining earlier in 2022 in the Washington metro before either the Baltimore or Philadelphia markets,” she said.
“Affordability challenges have had a bigger impact on the market [in the Washington region], where high home prices shut buyers out of the market earlier in the housing-market cycle.”
But Sturtevant has not thrown in the towel on appreciation.
“Prices will continue to rise in most local markets,” she predicted, while cautioning residents to “expect home-sales activity to continue to slow and inventory to expand further in the coming months.”
Sturtevant said the pace of price growth is likely to be “much lower” than it has been since the summer of 2020, when the market rocketed forward after shaking off the first wave of COVID was over.
For July, the number of closed sales in the region (5,456) dropped 27 percent from a year before – and was down by double-digit amounts in all 10 localities – while the number of pending sales was down by an almost equal amount.
The number of home showings recorded throughout the region was down 32 percent, another sign that some erstwhile buyers have decided to wait out the storm for the time being.
But it is not all bad news for sellers who fear they may have missed the boat. The amount of housing supply in July (1.32 months’ worth) was still in pro-seller territory, and the median number of days it took for homes to go from listing to ratified sales contract (8) was up just slightly from a year before and, in historical terms, still very strong.
Figures represent sales in the District of Columbia; Arlington, Fairfax and Loudoun counties and the cities of Alexandria, Fairfax and Falls Church in Virginia; and Montgomery, Prince George’s and Frederick counties in Maryland. All July 2022 figures are preliminary and are subject to revision.