The low inventory and rising prices that have dominated the Washington real estate market for the past few years have led to buyers thinking outside the standard list of D.C. suburbs. Although some of these areas don’t always register on “close in” real estate radar, several are offering prices and selections not found in the more well-known neighborhoods.
As a result, when 2016 drew to a close and all the data was in, it was clear that there were several locations across our region growing in popularity. Here are three Washington-area suburbs to watch during this year’s spring buying season:
Last year, Hyattsville joined the list of up-and-coming suburbs, and all signs point to 2017 being an even stronger year than the last. Median sales prices climbed above $250,000 for the first time since the recession, and it is likely that this will be the year they approach $300,000. The pre-recession boom years saw prices get close to $350,000, so there is still a way to go to reach those levels. But given how many real estate agents have mentioned the high demand and interest in Hyattsville, it is reasonable to expect that prices could get that high in the next few years.
The other good news about Hyattsville is that this is one of the pockets around the District where new listings are coming on the market in much greater numbers. Many months out of the past year have had double-digit increases in the number of new listings compared with the same month the year before. Homeowners in the area have seen their equity return so they can once again make a profit if they sell their home.
This is an area that typically plugs along without too many swings in one direction or another. That is, until the past 24 months. Germantown saw a definite uptick in closed sales and new listings that has real estate agents paying closer attention than ever to this part of Maryland. When we look at the data on a quarterly basis, seven of the past eight quarters have seen double-digit increases in the number of homes sold. In fact, during the second quarter of last year — spring’s peak selling season — Germantown had the highest number of sales in the past decade.
New listings have been trending upward as well, though it isn’t enough to meet increased demand. There are fewer than two months’ supply on the market, if homes were to continue to sell at the same pace. The median number of days on the market has also dropped to approximately 30 for most months out of the year.
Alexandria is one suburb to keep an eye on in coming months, largely because it has had a sudden and dramatic drop in the numbers of days a home stays on the market. From November 2016 through January, the median days on market has seen a double-digit decrease compared with the same month the previous year. That is a clear sign that demand has heated up.
Interestingly, homes aren’t selling more quickly simply as a result of decreased inventory. From November 2016 through February, the number of new listings added to the market saw an average monthly increase of 17 percent compared with the same months a year ago.
Prices in Alexandria have not yet seen a corresponding rise, so it remains to be seen whether this neighborhood has become one of the more popular suburbs. In 2016, the median sales price for this area hovered around the $500,000 price range, fluctuating about $25,000 either side of that throughout the course of the year. But the obvious demand for homes suggests that prices may well see significant increases this year. If that comes to pass, then we’ll know this has become a sought-after suburb.
As inventory remains in short supply, buyers have had to get creative about the places they look to purchase a home. We are fortunate that the Washington region has a varied set of suburbs. There are places to absorb some of the overflow of demand and still meet the housing needs of buyers. It looks like 2017 is poised to be a year when we see many more of these surrounding enclaves make a mark on the real estate scene.
David Charron, chief strategy officer of Rockville-based multiple-listing service Bright MLS (formerly MRIS), writes an occasional column about the Washington-area real estate market.