Pop quiz: Do people buy more homes or less homes during a pandemic?
When you live in Washington, D.C., the answer is more. A lot more.
COVID interest rates (with their notorious record lows) are motivating homebuyers to buy, buy, buy in DC’s low-supply market. The result? Prices are skyrocketing (and the buyer competition is fierce).
According to a report from MarketStats by ShowingTime, home prices in the DC region hit their highest level for the month of August in 10 years (source). Note that August is typically the slowest month of the year in real estate, and those high prices still had pending home sales rising to almost 25% compared to August 2019.
Let’s take a look at some stand-out stats:
- Home prices were at decade-highs for every property in the DC Metro region
- The median home price in August for the DC Metro was $515,000
- The median home price in August for Washington, DC was $648,000
- There were 862 pending home sales in DC in August (up 48% from August 2019!)
- There were 3,334 homes selling in 10 days or less (up 59% from August 2019)
- There was a 29% year over year drop in August’s supply of active listings
Now, let’s take a look at the new pending sales for neighborhoods we cover at The Estridge Group:
- DC Metro: 6,050 (up 24.9% from August 2019)
- Alexandria City: 300 (up 43.5%)
- Arlington, VA: 295 (up 50.5%)
- Fairfax, VA: 1782 (up 31.1%)
- Fall Church Ciy, VA: 22 (up 144.4%)
- Montgomery County: 1370 (up 21.2%)
- Washington, DC: 987 (up 38%)
What about DC Metro sellers?
With all of these people hot for DC Metro real estate, is there an increase in sellers trying to cash in on the demand? There is. New listings increased by 44% year over year, 60% in Arlington and 74% in Alexandria. However, it wasn’t enough to feed the demand. As stated above, there was a 29% year over year drop in August’s supply of active listings. That translates to a 1.3 month supply of homes on the market in August.
What does that mean for DC homeowners?
Trends are showing that DC homeowners are looking to stay in their homes longer (source). DC residents are also wanting a bigger home or more amenities added to their house. And in reaction to the limited supply of DC Metro homes on the market, prospective DC homebuyers are flocking to new construction.
Not only does new construction eliminate the chance of Coronavirus spread, it also allows the buyer to customize their home (which is now also their office, their “dine-in” setting, and main source of entertainment) in the way they want. Lastly, more and more DC homeowners are leaving the city for the suburbs. People are looking for privacy, distance, and a nice spacious environment to work from home (and possibly home-school their children).
What will the rest of 2020 bring for the DC Metro real estate market? Only time will tell. But The Estridge Group is here with you every step of the way. Please don’t hesitate to contact us with any questions.