The 2,942-square-foot five-bedroom, four-bathroom house at 4821 Upton St. NW in Washington is listing for $1.295 million. (By HomeVisit)
While there’s no doubt that a lack of homes on the market means sellers continue to have the upper hand, there are signs of buyer fatigue and flattening prices in the District.
“The housing market is slowing in nearly every metro area in the country,” says Nela Richardson, chief economist of Redfin brokerage in Washington. “We’re just not seeing the usual fall market pickup at the end of August and in early September.”
Affordability is the culprit in the District and other locations, Richardson says.
“There’s a limit to what people can afford, and, at the same time, buyers are getting pickier,” she says. “Buyers want value for their money, and some of them are willing to wait until more homes are available.”
While home prices in the city are still high, the pace of price increases has slowed.
In the District, the median sales price rose less than 1 percent between the first eight months of 2016 and the same period in 2017, says Jonathan Hill, vice president of customer engagement for the multiple-listing service Bright MLS (formerly MRIS) in Rockville, Md.
“We’ve been looking at low inventory and rising prices for so long, the market is just tired,” Hill says.
The number of homes sold in the District rose by 8.3 percent year over year, and, in an indication of the continued tight market, the average number of days a property stayed on the market before going under contract declined by 10.5 percent.
“By far, the majority of homes sold within one to 10 days,” Hill says.
The 2,490-square-foot four-bedroom, four-bathroom rowhouse at 641 Gallatin St. NW in Washington is listing for $749,900. (By HomeVisit)
Buyers can expect a continued shortage of homes, with just a 1.6-month supply at the end of August, Hill says. A balanced market has a five- to six-month supply of homes for sale.
Sellers need to recognize that this is not the time to overprice their homes, despite the low inventory, says Donna Evers, broker/owner of Evers & Co. in Washington, which was recently sold to Long & Foster Real Estate.
“Sellers who have been waiting for summer to end to put their homes on the market tend to overprice their homes in the fall,” Evers says. “This is particularly a problem for homes valued at $1.5 million or above. There are lots of expensive properties on the market, so sellers need to compete in that price range.”
Hill says the price range with the most listings at the end of August for single-family houses and attached townhouses was $1 million to $2.5 million.
“Sellers are sticking with their list prices and are reluctant to lower their prices even if it means they have to wait to sell their property,” Richardson says. “It’s still a seller’s market in the city, but it’s just not as strong as it was.”
Richardson says the properties that sell fastest in the city are priced in the $500,000 to $750,000 range. She says more-affordable starter homes can be found in Woodridge and Deanwood, both neighborhoods with fast-paced sales.
“This summer, inventory was down two percent and sales were up 26 percent, which shows you that the bathtub just isn’t being filled as fast as it’s being drained,” Richardson says.
However, she says anything priced above $1.8 million is mostly sitting on the market, particularly now that Trump administration officials have purchased their homes.
Price appreciation has been relatively flat in the city, Richardson says, so buyers are less fearful of being priced out of the market. She says fall buyers are less time-sensitive and will wait until they find something they value.
“Buyers focus too much on the home price rather than looking at the monthly costs of a property,” Evers says. “There are a lot of loan programs out there that can be helpful to buyers, and with financing loosening a little, they may find they can afford a little more than thought.”
The 775-square-foot one-bedroom, one-bathroom condo at 2001 12th St. NW, Unit 314, in Washington is listing for $495,000. (By David Pipkin, Redfin)
While newly built housing in the city may begin to ease the inventory strain, most of it consists of upscale, higher-priced and yet small units that work best for wealthy professionals without any dependents, Richardson says.
“The price per square foot for newly built city condos is nearly double the price per square foot for new houses outside the city,” says Chris Masters, executive vice president of McWilliams Ballard in Washington.
Even though the price per square foot is high, some of the new condos in the city this fall are available within a broad range of prices, from the $300,000s to more than $3 million.
“So many renters in this city are paying the equivalent of a mortgage, so as long as a project will be ready within six to eight months, before they have to renew their lease, they’re willing to buy,” Masters says. “Projects that are farther out than that are selling, too, but a little more slowly.”
One exception, Masters says, is Chapman Stables, where a historic stable is being refurbished and expanded with a modern building. He says that project is interesting enough that people are willing to wait a year to move in after buying.
Chapman Stables, at 57 N St. NW in the Truxton Circle neighborhood, has more than 100 units priced from the $300,000s for a studio to more than $1 million for a three-bedroom unit.
Other new condos include Elysium Logan, a 32-unit building at 14th Street and Rhode Island Avenue NW, with prices ranging from $550,000 for a one-bedroom unit to $3.4 million for a three-bedroom, two-level penthouse.
Kipling House, a Capitol Hill condo with 49 units at 900 11th St. SE, is designed for the first-time-buyer market, Masters says. Prices there range from the mid-$300,000s to the upper $700,000s.
Not far from Kipling House is Buchanan Park, a development of 32 townhouses and 41 condos in the former Buchanan School. The three- and four-bedroom townhouses range in price from $1.3 million to $1.5 million. The condos, developed by Ditto Residential, range from the low $400,000s to more than $1 million and have from 530 to 1,400 square feet.
Super-luxurious condos are selling now at two buildings in the West End. At 2501 M St. NW, the condos are priced from the mid-$700,000s to more than $3 million. At the Westlight at 1111 24th St. NW, the remaining condos are priced from $1.4 million to $4.4 million.
The Adele, at 1108 16th St. NW, has six “estate collection” condos that buyers can customize with the help of an architect and an interior designer, and seven “city collection” condos with private outdoor spaces and city views. The condos are priced from the $600,000s to more than $2 million.
Condo buyers this fall will have more options among smaller buildings around the city, too. Buyers looking for townhouses or single-family houses will face continued competition for the limited supply of homes.