This moderation is not as positive for sellers who would like to see their investment rise in value. Those homeowners who aren’t forced to sell may wait until prices start rising again and that could lead to an even greater inventory shortage than already exists.
Last month, median price of a home sold in the D.C. region was $411,000, down 1 percent compared with August 2014, according to data provided by RealEstate Business Intelligence, a subsidiary of MRIS. It was the first year-over-year decrease in 14 months.
Overall home prices in the area have essentially been flat since February. The year-over-year increase in median prices for December, January and February was around 4 percent. Since March, it has hovered around 1 percent.
Some jurisdictions, such as Arlington County, the District and Prince George’s County, continue to see strong price growth. Arlington County’s median price last month was $544,000, up 2.8 percent year-over-year. Its year-to-date median price of $563,750 is up 6.4 percent compared with 2014.
The District’s median price last month was $520,000, up 9.5 percent compared with August 2014. Its year-to-date median price of $524,900 is up 5 percent compared with 2014. Prince George’s County’s median price last month was $245,000, up 4.3 percent year-over-year. Its year-to-date median price of $230,000 is up 4.6 percent compared with 2014.
Two Maryland counties – Montgomery and Frederick – are seeing median price declines. Montgomery County’s median price last month was $400,000, down 3.6 percent compared with August 2014. Its year-to-date median price of $400,000 is down 1.2 percent compared with 2014.
Frederick County’s median price last month was $265,000, down 8.6 percent year-over-year. Its year-to-date median price of $268,000 is down 0.7 percent compared to 2014.
Low mortgage rates – the 30-year fixed-rate average has been hovering below 4 percent since late July – are helping fuel sales in the region. The 4,515 sales in the D.C. area last month was the third most for the month of August in a decade and exceeded the five- and 10-year averages for the month. As is typical for this time of year, sales dropped off compared with July, falling 13.6 percent.
The 4,713 homes under contract last month was the highest number of pending sales for the month of August in at least a decade, a 10.6 percent year-over-year increase. That number also exceeds the five- and 10-year averages for the month.
Inventory continues to rise in the region. There were 12,329 homes on the market last month, including 5,796 new listings. Total listings were up 10.3 percent compared with August 2014, and new listings were at their highest level for August since 2008. Fairfax County has the most homes for sale with 4,391, down 1.2 percent from last month but up 15.7 percent from August 2014.
Properties are taking longer to sell than a year ago. The median days on market was 25 last month, a three-day increase compared with August 2014. Homes in the District were snapped up the quickest (13 days on market), while those in Fairfax City lingered the longest (34 days on market).
When the federal government shut down for 16 days in 2013, the D.C. area housing market slowed significantly and didn’t start recovering until earlier this year. When the Federal Reserve considered winding down its bond-buying program in May 2013 — the so-called “taper tantrum” — mortgage rates spiked. The 30-year fixed-rate average rose 53 basis points in one week. It is difficult to predict if these events would have similar consequences this time around.