If you are in the market to buy or sell a Washington, D.C., luxury home this year, you may have some questions about the real estate market. The market has undergone a lot of fluctuation over the past few years, both nationally and locally. Potential home buyers and sellers are left wondering when the best time to enter the market might be. If this sounds like you, rest assured. The Washington, D.C., market is showing some positive signs this year. Discover how the latest market forecast and predictions for this area may help shape your decision.
State of the economy
One positive sign for those interested in Washington, D.C., real estate is the economy's strength. This area is well-known as home to the major branches of the federal government. The Washington, D.C., area is also recognized as one of the economic strongholds on the East Coast. Numerous national organizations, associations, and nonprofits have their headquarters here. In addition, Washington, D.C., hosts over 20 million tourists and visitors every year. The unemployment rate has dropped to its lowest level in over 30 years and is better on average than the rest of the nation too.
Implications for financing
Interest rates peaked last year and are showing signs of leveling out. Potential homebuyers will find different rates depending on the specific lender and type of loan they are pursuing. If you are interested in a 30-year loan with a fixed rate, you can expect a current interest rate of around 6.65%. If you are investing in a home mortgage with a 15-year fixed rate, it is currently hovering at about 5.89%. Those interested in purchasing a Washington, D.C., luxury home through a jumbo loan have additional considerations. Jumbo loans in D.C. are earmarked for loans set above $1 million, with an interest rate of 0.25-0.50% lower than the fixed rate. Adjustable-rate mortgages (ARMs) are rates that can be in flux depending on the index rate of the loan. So if interest rates go down after the initial period where the rate remains fixed, your interest rate will decrease as well. These rates are another popular option, and you always have the opportunity to refinance. Use a mortgage calculator
to investigate your options.
Predictions for the rental market
Approximately 58% of people living in the Washington, D.C.
, area rent their homes. The rental prices vary significantly depending on the neighborhood. Renters in the Brookland area, for example, can expect to pay approximately $2,076 per month, while those in the Federal Triangle will average $3,100 per month in rent. Prices in Washington, D.C., are also higher than in several competing cities in the area, including Annapolis and Alexandria. Renters can expect to pay less for their homes if they opt for Washington, D.C., over nearby Arlington. Competition for rentals will remain competitive this year, as the inventory in Washington, D.C., does not currently match the demand.
Considerations for home buyers
There is good news for buyers looking to purchase a new home or townhome in Washington, D.C., this year. Experts with the National Association of Realtors (NAR) expect the market to stabilize
after the frenzy of sales last year. Home prices are expected to decrease nationally by approximately 7%, although this does vary between regions. In Washington, D.C., the median home price is about $580,000, compared to the national average of approximately $392,000.
Buyers can also expect homes to stay longer on the market, averaging just over two months. This gives buyers more time to consider their purchase without feeling the pressure to decide quickly or risk losing out on their preferred home. Given this trend away from a competitive seller’s market, potential home buyers will also feel encouraged to pursue inspections to request necessary repairs. Buyers should also check into the Home Purchase Assistance Program
in Washington, D.C., to determine eligibility.
Forecast for home sellers
There is good news for home sellers in the Washington, D.C., area too. Although the market is showing signs of evening out, there is still a strong demand for homes in this area. Inventory remains lower, especially given the lack of robust new construction in the area. If the interest rates continue to drop over time, more buyers will likely return to the market and increase competition. Home sellers can stay competitive by setting the best price for their home and allowing some room for negotiation. Ask your real estate agent for a comparative market analysis (CMA)
outlining the fairest price point for your home based on your neighborhood’s recent history of similar sales.
Talk with a reputable real estate agent
Buyers and sellers of Washington, D.C., real estate should enlist the services of a professional real estate agent to support them through the process. A real estate agent
who is knowledgeable of the Washington, D.C., area will understand the latest market trends and how they will affect your upcoming transaction. Buyers can expect to learn more about the inventory available in Washington, D.C., depending on their preferred neighborhood. Their real estate agent will help them find the perfect home matching their lifestyle and budget. Sellers can expect not only a CMA but recommendations for any updates needed to appeal to potential buyers. Your real estate agent should also show you the comprehensive marketing plan they will employ to sell your home as quickly as possible.
Stay informed as you move forward
The forecast for the 2023 housing market holds positive news, whether you are buying or selling Washington, D.C., luxury homes this year. Understanding the latest trends will help you with the process of purchasing the perfect home or getting the most out of your investment with your listing. Hiring a knowledgeable real estate agent with a deep understanding of the Washington, D.C., area and the trends in the market will help ensure a smoother and more satisfying experience.
When you are ready to learn more, contact Washington, D.C., expert real estate agent Rebecca Weiner
. She is dedicated to ensuring her clients understand every aspect of the process and are comfortable with every real estate decision. Contact The Rebecca Weiner Group
to view available properties, or get started with your own listing today.