D.C. experienced considerable growth in 2013 and 2014, surpassing national averages. But in 2015 and the first half of this year, most major indicators — including averages sales price, median days on the market and sales to list price ratio — slowed to a pace only slightly ahead the national market as a whole, according to data from Rockville-based multiple-listing service MRIS.
Here’s a snapshot of how the D.C. market performed in the first half of the year:
Average sales price
On the whole, the average sales price — the average price at which a property sells — of all homes of any type in Washington are up 1.44 percent year to date in 2016 — $646,640 this year compared to $637,452 last year. This is certainly well above the median sales price of a home nationally, which hovers just below $250,000.
In particular, the highest average sales prices year to date in the District are in Zip codes 20007, primarily for Georgetown and Burleith ($1,067,347); 20016 for Cathedral Heights and American University Park ($1,042,904); and 20015 for the area around Friendship Heights and Chevy Chase ($1,017,269).
However, the biggest gainers in average sales price are a mixture of high-priced neighborhoods with developing areas outside the city center. The largest gainer in average sales price through the end of June was American University Park and Cathedral Heights, rising 19.9 percent to $1,042,904 in 2016 from $870,046 in 2015.
Notable growth also occurred in the far reaches of Southeast and Northeast Washington. The second- and third-biggest gainers in average sales price so far in 2016 have been seen around Zip codes 20020 for Anacostia and Hillcrest (up 17.7 percent to $292,159) as well as in 20019 for Deanwood and Benning Heights (up 17.3 percent to $256,417).
Median days on market
Unlike other leading indicators, median days on the market — the number of days it takes a property to go from active on the market to under contract — is measured in how it shrinks not grows. A low number of days on market often corresponds to a higher sales price and vice versa. For the District, the average days on market as a whole are 39 days for 2016, down one day from 2015.
The area with the lowest median days on the market at just a week is Zip code 20005, the area around Logan Circle and Thomas Circle in Northwest. Much of the areas around downtown, including Shaw, Bloomindale and LeDroit Park, have eight median days on the market, dropping by one from last year.
Days on market are rapidly decreasing in similar trends to average sales prices. The greatest drop in median days on the market so far in 2016 has been in Zip code 20016 for Cathedral Heights and American University Park — from 13 in 2015 to 10 in 2016. Moreover, the 20019 Zip code of Deanwood and Benning Heights has seen rapid reductions in median days on the market from 22 in 2015 to 18 in 2016. The third biggest change was found in Zip code 20012, the area around Takoma D.C., with a 16.7 percent reduction in median days on market from 12 to 10.
Sales to list price ratio
The sales price to list price ratio — the price at which a property sells compared to its original list price — for all real estate sales in Washington has remained steady through the first half of 2016 at 98.9 percent. This means that homes sell on average for 98.9 percent of the listed value — for example, a home listed at $500,000 will sell on average in D.C. for $494,500.
So far in 2016, the lowest sales to list price ratios can be found in Zip codes 20010 in Columbia Heights in Northwest and 20017 in Brookland and North Michigan Park in Northeast — 100.4 percent. However, small pockets of certain Zip codes are even higher than this. The biggest standout in 2016 is North Cleveland Park with a sales to list price ratio of nearly 105 percent. Other neighborhoods of note include Marshall Heights, an up and coming Southeast neighborhood, with a ratio of just over 103 percent.
Interestingly, the biggest changes in sales to list price ratios can be found entirely in Southeast with Barry Farm, Marshall Heights and Anacostia, each seeing more than a 5 percent increase in the average ratio. Clearly, the ability to bargain in these neighborhoods is becoming more difficult.
What does this mean for the rest of 2016?
The first half of 2016 has shown that growth for the rest of the year will be slow. As prices in the District have grown so rapidly the past several years in the central parts of the city, we are now seeing slower conservative growth elsewhere.
In turn, this may have driven more development in the outermost parts of the city, including the far reaches of Wards 7 and 8, including areas such as Deanwood, Hillcrest, Anacostia, Barry Farm and Marshall Heights.
For the rest of the year, I believe the D.C. area should expect this average sales growth to continue under 2 percent, and continued development spreading even farther from the center of the city.
Coming up: the Maryland market on Tuesday and the Virginia market on Wednesday.
Tim Savoy, a real estate agent with Coldwell Banker Residential Brokerage Dupont/Logan Circle, writes an occasional column about the Washington-area housing market. He can be reached at Timothy.Savoy@cbmove.com and on Twitter @SavoyRealEstate.