David Howell, McEnearney Associates CIO: I want to thank Tom Williams of our Spring Valley office for letting us shoot in this beautiful home at 3304 Cummings Lane in Chevy Chase, Maryland. It’s incredible new construction, and it’s just immaculate. Over 5,300 square feet with five bedrooms and four and a half baths, there are thoughtful details throughout the house. One of my favorites is the crumb vacuum built into the kitchen island baseboard. Click here for the listing details, and I think you’ll be blown away.
But in this price category between $2,000,000 and $2,500,000 – which accounts for less than a quarter of one percent of all home sales in the region – the absorption rate is about 12%. While that means it’s a buyer’s market, that is still a solid number compared to most of the area’s upper bracket markets. In Potomac, Maryland, it’s 7%, McLean, Virginia is 10% and Great Falls Virginia it’s just 4%. About the only market that is stronger is on the other side of Western Avenue in Chevy Chase, D.C. – there, the absorption rate is closer to 20%.
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.
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!
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.
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.
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.