State of the Market: Where have all of the DC homes gone?

Over the past 8 months we have seen a declining trend of housing inventory in the Washington DC real estate market. According to the Real Estate Business Intelligence report, there has been a 22 percent drop in December 2011 compared to December 2010. Of the homes on the market, 1 out of 20 homes is a foreclosure indicating a decline in market share at 16 percent in December 2010. Short sales have remained steady at 23 percent of the sales and median sales prices fell 3.6 percent in 2011.

What are the reasons for the low housing inventory?

There are many factors which contribute to the current lack of inventory. One reason is the bad economy which halted new housing construction between 2007 and 2009, where the majority of builders couldn’t get financing to finish projects. Newly completed housing projects that were originally slated to be condominiums ended up as apartments. Another reason is that sellers are refraining from putting their homes on the market to prevent from loss of declining home prices due short sales and foreclosures bringing down house values.

What can homebuyers expect in the current Winter market?
If you are looking for homes in DC, then it is more important than ever to do your research beforehand so you can have realistic expectations of the current Winter market.

Condos
The majority of homes for sale in the DC market are condos. Studios ranging from $160k-220k, 1bedrooms from $250k-$430k, and 2bedrooms from $480k-$700k. There is a wide range of condo prices due to the location and amenities of each building. It is becoming more difficult to finance condo purchases as lenders are placing strict regulations on condo association performance.

dc condos for sale

Townhomes
If you are in the market for townhomes, you will find a majority of fixer-uppers starting at $310k to $499k depending on the location (ie. Shaw, Ledroit Park, Eckington, Bloomingdale, etc). We have seen an increasing trend of developers and investors purchasing old townhomes and putting the bare minimum/poor renovations in homes. If you are expecting a high quality, fully-renovated townhome, then it will cost you at least $500k.

dc townhome for sale

Single Family Homes
Single family detached homes in the District can range from $350k in Brookland, $550k in 16th Street Heights, $800k in American University Park/Tenleytown, $1.5 million in Friendship Heights/Chevy Chase. Again it is all about LOCATION, LOCATION, LOCATION!!!

Hopefully you found this post useful! If you would like more information about Washington DC real estate, please contact Realty Pros at 202-537-3800. If you’re new to DC, I’d especially like to extend a warm welcome. I value the opportunity to help my clients find the home that meets their needs and provide them with professional, reliable service.