The Washington-area housing market enjoyed a strong year in 2016, despite head winds that could hold back its progress going forward.
Home prices around the region climbed modestly last year, as they have the past three years. The median price for a home crept up to $415,000 last year, matching the record set in 2007 (though not adjusted for inflation), according to data provided by ShowingTime RBI, based on information from MRIS, the region’s multiple-listing service. The 1.2 percent increase from 2015 was on par with the 1.1 percent increase from 2014 to 2015 and the 1.5 percent increase from 2013 to 2014.
Although prices increased in Washington as a whole, some jurisdictions fared better than others.
“D.C. continues to show the strongest price gains in the region, though at a somewhat slower pace than in 2015,” Terry L. Clower, director of the Center for Regional Analysis at George Mason University, wrote in an email. “The Maryland suburbs, collectively, saw home prices increase at a faster pace compared to 2015, which is perhaps an indicator that the market is solidifying for some of the submarkets devastated by the foreclosure crisis. Northern Virginia housing markets, on average, saw very modest gains in 2015, though anecdotally there are highly competitive neighborhoods.”
Even as prices flattened, sales surged. The 53,504 home sales last year were nearly 6 percent higher than in 2015.
“The region saw a good uptick in total home sales in 2016, and prices are rising in most all markets,” Clower said. “A lack of inventory continues to be a drag on the market as buyers find relatively few options and wind up on the sidelines.”
The number of homes for sale keeps shrinking, making it challenging for buyers to find something they not only like but can afford.
“Overall listings in the for-sale housing market continue to decline, which is substantially impairing market velocity and market participation,” Clower said. “Unfortunately, I do not expect to see this trend improve substantially in the near term.”
Although a shortage of homes for sale should drive prices up, rising mortgage rates may tamp down price gains. Looking ahead to 2017, Clower expects another solid year for the housing market.
“Prices have finally recovered to pre-recession levels, though not on an inflation-adjusted basis,” Clower said. “All else being equal, I expect markets to continue to show price gains at a modest pace. However, how the new administration’s rules impact the local workforce is a bit of a mystery.”
Asked to pick areas where housing might do better than expected in the coming year, Clower chose Arlington, Bethesda and the District.
“Arlington was doing fairly well, even before the Nestlé announcement,” he said. “Bethesda continues to perform well. And D.C. will continue to outperform the suburban markets on average.”
To get a sense of how the housing market fared where you live or might want to live, we broke down the data by Zip code. Note: Only sales recorded in MRIS, the multiple listing service, were included. Zip codes with fewer than 60 sales in 2016 were excluded. Private sales were not included. Sales include single-family homes, townhouses and condos. Click on the interactive graphic to search your Zip code.
Homes didn’t last long in this Zip code. Half of them in the Del Ray and Rosemont neighborhoods sold in a week or less.
The median price of a home sold in this McLean Zip code was $1 million, the most expensive place to buy.
The median price of a home sold in this Greenbelt Zip code was $169,794, one of the more affordable places to buy.
One of the biggest price gains in the area was in this Hyattsville Zip code. Prices rose $40,000, a 20 percent increase in median price.
Brookland is one of the hottest neighborhoods in the District. Sales jumped 38.2 percent from 2015.
The West End neighborhood had the highest price per square foot ($704) and the most cash sales in the area. Nearly 44 percent of the sales were all cash.