The typically resilient Washington metro housing market is feeling the effects of fast-rising interest rates and high home prices just like the rest of the nation, according to a new report from Bright MLS.
Bright MLS’s October 2022 Market Report found that the median price rose 2.8% year-over-year, with higher gains in some of the region’s suburban markets. Price growth continues to decelerate across the region, the report shared, though home prices are still more than 20% higher than they were before the pandemic. In the Washington region, condo prices were up the most, rising by 8.2%.
Key highlights:
- The pace of price growth has slowed considerably and prices have fallen in some local markets, including Arlington County, Virginia; Montgomery County and Washington, D.C.
- Home sales came in at 4,069, which was down 35.6% from a year ago and is the lowest monthly sales total in the region since January 2020.
- Compared to last year at this time, homes are taking almost a week longer to sell: The median days on market was 15, unchanged from last month but 6 days longer than a year ago.
- The number of new pending sales was down a staggering 40.7% in October. Across the Washington metro area, there were just 4,131 new pending sales, which is the lowest monthly total since December 2019. The year-over-year decline in pending sales is the steepest since December 2007.
- Some of the biggest YoY new pending sales declines for the Washington metro area were in Fairfax County, Virginia (-47.3%) and Loudoun County, Virginia (-47.0%).
- There were a total of 7,976 active listings. Inventory is up by 3.9% compared to a year ago, led by a surge in the number of single-family detached homes on the market (+25.9%). Despite the recent uptick, inventory is still 35% lower than it was 3 years ago.
- Low inventory also pushed prices up 2.8% from a year ago, a reversal from the double-digit increases over the past two years.
- Even though inventory is still low, some local markets have seen a dramatic increase in the number of active listings, including Loudoun County (+50.6% year-over-year) and Prince George’s County, Maryland (+40.1%). Supply fell in Arlington and Alexandria, Virgina, as well as in Montgomery County, Maryland.
- The number of showings falling below 100,000 for the first time since the spring of 2020. The total number of showings was off by 42.7% compared to last October.
Major takeaway:
“With a stable employment base concentrated in high wage government and professional services employment, the Washington metro area housing market tends to be very resilient. But right now, the double jolt of fast-rising interest rates and high home prices has stopped the market in its tracks. There is no reason to expect a market correction like we had in 2008—the mortgage and housing market fundamentals are just very different now. In the near term, expect home sales activity to be very slow and prices to fall from their peaks,” said Bright MLS Chief Economist Lisa Sturtevant. “The encouraging news for the market, however, is that the underlying economic and demographic fundamentals in the Washington area are strong and the region’s housing market should fare better than others if the national economy goes into a recession in 2023.”
For the full report, click here.
