In the D.C. region, walkable neighborhoods are hot, suburbs are cooling, and an election year could have repercussions. (Gary Cameron/Reuters)

The Washington region experienced increases in sales and inventory in 2015 and stable home prices, but when viewed on a localized basis, the housing market looks a lot less homogeneous.

“Unlike previous housing markets where the whole ocean of home prices and sales went up and down in unison, the market in this area is choppier now,” says Hans Wydler, a broker with Wydler Brothers Real Estate in the District. “We’re seeing an accelerated market in the city and in walkable neighborhoods in places like Bethesda, Arlington and Rockville Town Center, but the market is more tepid in traditional suburban neighborhoods.”

One thing Wydler says will affect every neighborhood in the D.C. metro area is that 2016 is an election year.

“Elections usually put a bit of a chill in the market in the late summer and early fall because buyers don’t like the lack of clarity around what will happen over the next four years,” Wydler says. “I think that will accelerate buying earlier in the spring and summer this year, and then we’ll see an acceleration again after the election.”

Although unanticipated events can affect the housing market, local experts predict these potential trends for this year:

Rising mortgage rates could increase the pace of sales rather than slow the market. “Interest rates are likely to go up several times in 2016, which could be a motivating factor for buyers who have been sitting on the fence,” says Jonathan Hill, vice president of marketing and communications for multiple-listing service MRIS in Rockville. “There’s a lot of pent-up demand out there from buyers who haven’t been able to find a place to buy, so we’re likely to see an early spring market with a lot of sales in the first and second quarter of this year among people who want to buy before rates go any higher.”

When mortgage rates go above 5 percent, there’s a bigger psychological impact than if they stay below that number, says Doug Benner, a senior loan officer with 1st Portfolio Lending in Rockville. He expects buyers — and homeowners who still want to refinance — to rush to lock in rates early in the year, although some buyers will be unable to qualify for a loan or be uncomfortable with the higher payment that comes with a higher rate, particularly because of the expensive home prices in this area.

“When you go from 3.75 percent to 5 percent on a $500,000 loan, that’s real money,” Benner says.

The monthly principal and interest on a $500,000 loan at 3.75 percent is $2,316, which increases to $2,684 at 5 percent.

Changes to mortgage and closing requirements will affect all buyers. Since the implementation in early October of the federal government’s initiative to make mortgages easier for consumers to understand, known as TRID (the Truth in Lending Act — Real Estate Settlement Procedures Act Integrated Disclosure rule), Wydler says more closings have been delayed and he has experienced more problems with lenders than in the past.

“Loan administrative fees are going up because lenders have to increase their staffing to handle more of the closing process that used to be handled by title companies,” Benner says.

Numerous small changes have gone into effect on government-backed Federal Housing Administration and Veterans Affairs loans, as well as on the loans purchased by Fannie Mae and Freddie Mac, some of which will make it easier for people to qualify for a loan.

“Generally, the government loan programs, especially FHA, have tightened their qualifications while the Fannie Mae and Freddie Mac requirements have gotten looser,” Benner says.

Portfolio loans, which are kept on the books by a lender rather than sold to Fannie Mae or Freddie Mac, are becoming more available, Benner says. This is particularly helpful to local self-employed individuals or others who have good credit and income but don’t meet normal loan underwriting standards.

More homes should be available for sale this year in every area. The inventory of homes for sale rose for 26 consecutive months through November, and was up 6.6 percent, according to RealEstate Business Intelligence, a subsidiary of MRIS.

“We expect inventory to increase this year in all areas and price ranges, especially early in the year, because sellers want to take advantage of buyer demand before interest rates rise too much,” Hill says. “Price appreciation has been good in the city and close-in suburbs, so that’s another motivator for sellers.”

Wydler says new development, mostly condos, is increasing inventory in Bethesda, the D.C. waterfront and the Mount Vernon Triangle area of Northwest Washington.

Wydler says he anticipates that multiple offers will continue on homes in desirable locations that are priced right, particularly rowhouses, which are in demand among growing families who want to stay in the city.

The median number of days a home is on the market before going under contract fell to 25 for the region in November, well below the 10-year average of 38, according to RBI. In the District, the median number of days on the market dipped to 13. “Based on activity in 2015,” Hill says, “I think demand and supply will meet in 2016 and it will be a healthy market.”

Home values are expected to maintain a slow-but-steady rise. Although home prices for the entire metro area stayed flat year-over-year, median home values in the District rose 9.1 percent between November 2014 and November 2015 and were up by 21.1 percent in the city of Alexandria, according to RBI. During that period, median home prices rose by 6.6 percent in Prince George’s County and by 2.3 percent in Northern Virginia.

“I expect prices to continue to appreciate this year, but without any spikes or bubbles,” Hill says. “Slow and steady is best for the market.”

Walkable neighborhoods will still be hot. Wydler says he anticipates that the trend toward urbanization will continue to strengthen, with young families staying in the city longer and empty nesters moving into the city, close-in suburbs or walkable communities.

“Pretty much every D.C. neighborhood is hot right now, including Shaw, Eckington, H Street, Logan Circle, Petworth and 14th Street,” Wydler says. “Even some of the older neighborhoods have more energy because of new developments like Cathedral Commons in Cleveland Park, Wardman Tower in Woodley Park, the revitalization of Van Ness and planned developments in Friendship Heights. Silver Spring and Takoma Park [Md.] are also seeing a lot of redevelopment.”

Lerner is a freelance writer.