At the start of the year, we predicted that this year’s Washington, DC metro area real estate market would look a lot like 2018: stable contract activity, modest price appreciation, stable mortgage interest rates, and continuing low inventory. With over half of the year in the books, we were mostly right – with one glaring exception: the inventory of available homes.Continue reading “A shift in the market we haven’t seen before”
In this video, we’re continuing our conversation about absorption rates.
But first, I’d like to thank Emily Gordon and Phillip Allen of our DC offices for letting us shoot this video in their incredible new listing at 3039 16th Street, NW in Columbia Heights. Unique is a word that’s overused – but this 2 level, 2 bedroom condo really is unique. 20-foot ceilings, 18-foot windows, magnificent views, incredible smart home features and a private elevator right to the unit. Take a look at the info below, click on the link and enjoy!
Evaluating the impact of absorption rates is really a matter of leverage. The higher the rate, the more bargaining power the seller has. Let’s take a look at the conditions right here in Columbia Heights. Over the last several months, the absorption rate for condos has been right around 35%. That’s a seller’s market, and the results show that. Since the first of the year, condos here have sold for an average of 99.5% of original list price in an average of 34 days. Good stuff!
On the other side of the river in the Shirlington area of Arlington County, condos are less expensive and there haven’t been many on the market. Absorption rates have been running between 70% and 80% – what we call an extreme seller’s market. And the results are pretty staggering. Properties have sold for an average of 2% above original list price in an average of just 11 days.
Two really good markets, appealing to two different kinds of buyers. As we have noted before, the takeaway is simply this: every market is different and if you’d like to know more about how things are in your neighborhood, we encourage you to call your favorite McEnearney Associate and we’ll give you an in-depth analysis.
As always, we appreciate your checking in with us – and don’t forget to check out the link to this wonderful condo!
—David Howell, “The state of the D.C. area real estate market”
We’re now firmly in the spring market, and there’s one question that has emerged that’s pretty hard to avoid: What happened to listing inventory in the City of Alexandria and in Arlington County?
At the end of March, most of the metro area had roughly the same number of listings on the market as this time last year. But in Arlington County, inventory is down 40%, and in the City of Alexandria, there were exactly half as many homes on the market.
Where did the listings go? Contract activity is a little higher than last year in both of these areas. But it isn’t contract activity that accounts for the big drop in inventory.
There has been a significant reduction in the number of new listings coming on the market; it simply isn’t being replaced at the same levels we have historically seen. The Amazon HQ2 announcement may have something (or a lot!) to do with that, as some would-be sellers may be holding off with the expectation of higher prices down the road.
The lack of inventory has pushed absorption rates into the “extreme sellers’ market” for most price ranges in Arlington and Alexandria. Although prices are higher than before the HQ2 news, that’s generally true throughout the region. We haven’t yet seen the big spike in prices that ordinarily accompanies very low supply. We’ll be keeping a close eye on this in the months ahead.
Every market is different and if you’d like to know more about how things are in your neighborhood, we encourage you to call your favorite McEnearney Associate and we’ll give you an in-depth analysis.
— David Howell, “State of the D.C. area real estate market: Where did all the listings go?”
With the government shutdown in the rearview mirror, we were curious how the market fared in February. And it probably won’t surprise you that, since all real estate is local, there were some considerable differences.
Just one example: in Kalorama and Georgetown, the market was a little softer than this same time last year. There was a little more inventory and little less contract activity, but absorption rates remained squarely in the “balanced market” stage. In fact, the inventory of available homes on the market crept up all over DC and suburban Maryland while contract activity was pretty stable.
On the other side of the river in Northern Virginia, we saw a very different dynamic. Absorption rates in most areas rose compared to last February. At a quick glance, that would seem to indicate an improving market. But that’s not the whole story. While inventory was rising in DC and Maryland, it has actually been falling in the Virginia suburbs so there were simply fewer homes for the market to “absorb.” So absorption rates rose despite fairly flat contract activity.
The takeaway is simply this: every market is different and if you’d like to know more about how things are in your neighborhood, we encourage you to call your favorite McEnearney Associate and we’ll give you an in-depth analysis.
—David Howell, “The real estate market post-government shut down”
Rather than feeling suffocated amongst the heaps of materials we tend to possess these days, why not make things simpler? At the age of 30, Marie Kondo has become a sensation in the eyes of millions of people who look to her when tidying up their homes. Her best-selling book, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing also inspired a Netflix series, and she has launched a lifestyle brand, KonMari.
In each episode, Marie Kondo teaches her method by entering people’s homes to help them achieve that homey and stress-free secure feeling that promotes a positive life change. When holding the item, if it does not spark joy, then thank it for its time and set it free.
The partial government shutdown that started right around Christmas and extended through almost all of January undoubtedly put a squeeze on the metro DC real estate market.
We took a look at absorption rates – the pace at which the market is absorbing” the available inventory – in January and compared those to rate the previous January, and there is an inescapable conclusion: the market was slower.
December brought some truly incredible absorption rates in Arlington and Alexandria in the aftermath of Amazon’s HQ2 announcement, while the rest of the region continued to see more typical performance.
Compared to the previous December, contract activity in Alexandria was up 13% in December 2018 and was up 20% in Arlington. The Amazon announcement created a perfect storm – it fueled demand precisely at a time when inventory is seasonally low. In December 2017, inventory was about 40% lower than it was in September 2017 in both Alexandria and Arlington. As expected, inventory was already headed down before the Amazon announcement, so when contract activity increased in the last six weeks of the year in Arlington and Alexandria there was already less inventory to fight over. And since we were then in a time of year where relatively few listings come on the market, buyers were soaking up whatever was there.