For 25 consecutive months, median home prices have been rising in the DC area. Now, signs are emerging that the high prices are taking a toll on the market.
The October housing report from Bright MLS shows that regionwide home prices cruised to a decade-high for October, rising by 3.2 percent year-over-year to hit $426,475. In DC proper, prices rose by 9.5 percent over the last year, jumping more than $50,000 to come in at $602,250, just shy of the all-time record for the city.
While record home prices may be good for homeowners, it's having a rough effect on home sales.
The slide in area home sales observed in the late summer has only accelerated. There were 6.1 percent fewer closed sales in October than a year ago. The effect is even more pronounced in the District, where sales fell by 10.7 percent year-over-year. Pending sales in October point to this trend continuing for the rest of the year. The number of homes that went under contract in the region last month fell by 4.7 percent compared to the previous year; in DC proper, pending sales fell by almost 11 percent.
As home prices reach new heights, the number of homeowners deciding to sell continues to rise. The number of new listings hitting the market in the region increased by 7.6 percent last month. DC proper trended even stronger, with the number of new listings increasing by 8.1 percent.
In addition to high home prices and rising inventory, the third headwind for home sales is the fact that interest rates are as high as they have been in quite some time. Last week, long-term rates came in at just under 5 percent, the highest they have been in more than seven years.
This article originally published at https://dc.urbanturf.com/articles/blog/as-dc-area-home-prices-hit-new-records-home-sales-falter/14684.
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