Home prices in the D.C. region overall have been flat for some time, and it looks as if they’ll stay that way for the foreseeable future.
That’s good news for those who fear another real-estate bubble, but bad news for homeowners who bought at boom levels and are still waiting for prices to rise.
Prices aren’t flat everywhere – see the District and any walkable community near a Metro station. But looking at the region as a whole, prices have stubbornly refused to budge for several months. And despite strong sales and low inventory, one set of data suggests prices likely won’t move much anytime soon.
John Wake, an economist and real-estate agent in Phoenix, was curious to see if there was a way to figure out where prices were headed in metro markets across the country. As he wrote recently on his blog Real Estate Decoded, “Even in a market with rapidly rising home prices, not all homes will be rising in price.”
In an effort to gain better insight on price trends, Wake stumbled upon a dataset published by Zillow called “Increasing Values (%).” Using its controversial Zestimates, the company calculates what percentage of homes in a market saw their values increase in the past year.
Wake is well aware of the flaws with Zestimates and has written about the problems with them. Still, he says they can be useful in this case.
“There’s tons of error that can be involved in it, but it gives you a ballpark,” he said.
Wake took “Increasing Values (%)” and compared it against the well-regarded Standard & Poor’s/Case-Shiller home price index to see how accurately it predicted future home prices. What he found is that it generally is a good predictor.
“Instead of just looking at prices, because prices move so slowly, can I get a better feel for changes in the market?” Wake said. “That’s the concept behind it.”
Of the 20 metro areas he looked at, Washington had the weakest price movement at 44 percent. Portland, Ore., had the strongest at 92 percent, meaning the Zestimates of 92 percent of the homes in that metro increased in the past year. Wake put together an interactive graph showing “Increasing Values (%)” and the Case-Shiller data for the 20 metros.
San Francisco, which has long been a hot market, seems to be losing momentum, according to the data. Six months ago, the city was at 92 percent. Now it’s down to 82 percent.
The latest data from ShowingTime RBI, which is based on listing activity from MRIS, a multiple-listing service based in Rockville, Md., bears out Wake’s findings. Median prices in Washington once again held steady last month.
The median price of homes sold in the D.C. region last month slipped to $399,000, a $1,000 dip from March 2015. The median price has not risen year-over-year in the past six months.
Median prices were slightly higher in Loudoun County ($440,000 last month from $420,000 in March 2015), Prince William County ($325,000 from $311,062) and Prince George’s County ($234,900 from $224,900).
Median prices slid in Alexandria ($459,500 last month from $494,900 in March 2015), Arlington County ($542,000 from $570,000) and Montgomery County ($385,000 from $397,450).
Median prices were essentially flat in the District ($505,511 last month from $500,000 in March 2015), Fairfax County ($460,000 from $461,000), Howard County ($373,000 from $365,162), Anne Arundel County ($300,000 from $299,450) and Frederick County, Md., ($260,000 from $260,500).
The number of homes sold in the D.C. region last month was up 2.5 percent from March 2015. The 3,755 sales marked the 16th month of year-over-year increases and was the highest number of sales for March since 2010.
Pending sales – those homes that went under contract but the deal had not closed – were the highest they’ve been, an indication of a strong spring selling season. The 6,165 pending sales last month surpassed the previous high of 5,671 set in March 2012. This is the second month in a row a new record has been set for this metric.
The number of homes listed for sale at the end of last month was 9,774, higher than it was a year ago but still well below the peak of 24,855 in 2008. The 8.4 percent year-over-year increase marked the most growth since October 2013.
The District had the biggest increase in inventory with 1,268 active listings, a nearly 22 percent increase from March 2015. Fairfax, Arlington and Prince George’s counties each saw increased inventory compared to March 2015.
More sellers are putting their homes on the market, another good sign for the spring buying season. The 8,352 new listings last month were the most for the month of March since 2007.
Half the homes sold in the region last month were on the market for 27 days or less, an increase of two days from March 2015. Condos were the quickest sellers, with half going under contract in 24 days or less. Townhomes had a median days on market of 25, and single-family detached homes had a median days on market of 31.