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.
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.
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It’s official: the Amazons are coming! After 14 months of speculation, the odds-on favorite Crystal City was indeed the winner in the HQ2 sweepstakes, but with a twist. Queens, New York will get half of the planned 50,000 jobs that Amazon says it will create during the next 10 to 12 years. And in this case, getting half the loaf may turn out to be better than getting the whole thing.
We’ve been fortunate to have a very healthy real estate market in the metro Washington D.C. area for several years, and as we head into the fall market, that’s still the case.
Last month, we looked at some of the hottest areas in the region, with absorptions rates over 60% – what we call an extreme seller’s market. This month, we’re looking at the other end of the spectrum, where there is plenty of available inventory but less contract activity – those areas and price ranges where the absorption rate is 15% or lower, a buyer’s market.
Generally, that characterizes the market for homes priced more than $1M – to be sure, there are some luxury markets that are hotter than others, but we’re focusing today on homes priced less than $1M because that’s the heart of the market.