Explore Who the Real Estate Market Favors Right Now--and How You Can Use It to Your Advantage
Just like the stock market, the real estate market ebbs and flows, experiencing peaks and valleys not only in terms of value, but also in terms of when it favors buyers versus sellers. With lower inventory and higher prices for the past few years, the
Washington, DC real estate market has favored sellers. But with a trend towards more supply becoming available and move-up buyers opening up the market for first-time buyers, signs are pointing to the DC market moving from a seller’s market towards a buyer’s market. Let’s explore.
Timing
Historically,
trends have shown that the housing market starts to heat up in the spring months, as owners--especially those with children--prefer to move and settle into a new home in favorable weather before the school year picks up again in the fall. DC’s market is no exception, with the spring market looking more favorable for buyers. Thus, the power dynamic typically shifts seasonally, with late fall and winter favoring sellers and spring and summer favoring buyers.
A New Kind of Buyer
While supply affects the market, the number of buyers entering the market also impacts the power dynamic in real estate. In DC, there has been
a trend towards higher mortgage loans, pointing to a change in the type of buyers active in the market. A higher average loan amount suggests that buyers are going after more expensive homes and that they are likely not first-time buyers. Characterized as move-up buyers, these are people trading in their lower-priced homes for an upgraded property at a higher price point. This benefits sellers at the higher end of the market while freeing up inventory for first-time buyers.
Location
Another trend shaping the DC real estate market has been the impact of peripheral ZIP codes. Experts have seen a big shift in favor of buyers in neighborhoods surrounding the immediate DC metro area, including Northern Virginia and parts of Maryland like
Bethesda and
Chevy Chase. Inventory in the District remains limited compared to supply in the more suburban communities surrounding the city, so buyers have more to choose from and less competition once they go slightly outside DC. Homes tend to sell faster and for a higher price in DC proper, favoring sellers, while ZIP codes on the periphery see relatively longer times on the market, more common price cuts, and larger discrepancy between list price and sale price.
Overall, the market in DC has favored sellers for years. While inventory may remain limited, opportunities for move-up and first-time buyers in the market, as well as the availability of peripheral neighborhoods, are increasing power in buyers’ favors.
If you are interested in buying or selling a home in DC Metro area,
Contact us today. It would be our pleasure to serve as your DC Metro area real estate agents and help guide you through the process.
