Why DC’s Housing Inventory Shortage Will Continue ‘For Foreseeable Future’

by Lark Turner

Why DC's Housing Inventory Shortage Will Continue 'For Foreseeable Future': Figure 1

A recent uptick in the number of homes on the market hasn’t been enough to balance an inventory shortage in the DC metro, and low inventory will likely continue to be a theme through the year.

“The DC area still has an inventory shortage and likely will continue to have inadequate supply relative to demand for the foreseeable future,” said Corey Hart of date firm RealEstate Business Intelligence.

There were 0.8 pending contracts per active listing in February, which is down significantly from 2013 when it was at one time as high as 1.5 pending contracts per active listing. But don’t let that relative drop fool you, Hart said; “[a 0.8] ratio is very, very high.” The larger issue is that inventory dropped almost 75 percent from 2009 to 2012, and that huge decline hasn’t been offset by slight gains in the past few years.

That means it’s still firmly a seller’s market in the area. The market for townhomes is the most inflexible, with the highest demand relative to supply. There are fewer active townhome listings than townhomes under contract.

For the inventory to turn around, Hart said, the DC area would have to see sales drop dramatically combined with a rush of new listings hitting the market.

“It would take several months of double-digit percent declines in purchase activity coupled with double-digit spikes in new listings for inventory to tip into balance,” Hart said. “The trend over the past three months doesn’t portend that we’re near the end of the seller’s market.”

That trend, he said, looks more like this:

  • November 2014: New listings down 5.1%; Contract activity up 1.2%
  • December 2014: New listings up 12.9%; Contract activity up 10.8%
  • January 2015: New listings up 4.4%; Contract activity up 6.2%.

Slight increases in the number of days homes are spending on the market do give buyers a bit more of an advantage, but Hart predicts that this spring most homes will still go under contract within about two weeks as competition remains high.

See other articles related to: realestate business intelligence, rbi, inventory

This article originally published at https://dc.urbanturf.com/articles/blog/dcs_inventory_shortage_likely_to_continue_for_the_foreseeable_future/9572


  1. Paul S said at 1:15 am on Friday February 27, 2015:
    Why is inventory so low? Is it because banks arent lending to developers of new condo projects? Seems all the large projects that come online the last 4-5 years are almost always becoming rentals.
  1. Phil said at 5:32 pm on Friday February 27, 2015:
    The down zoning of the R4 district that is expected to pass by a 3:2 vote by the zoning commission will inevitably make this problem worse.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!

Northern Virginia

Profiles of 14 neighborhoods across Northern Virginia

Looking to Give People A Reason to Stay Past 6pm
Happily Straddling the Line Between City and Suburb
Columbia Pike
Arlington’s Neglected Stepchild is Getting a Makeover
Crystal City
Turning Lemons into Lemonade
Lyon Village
Developing An Air of Exclusivity?
Hitting Its Growth Spurt
An Urban Village Hitting Its Stride
Del Ray
Virginia’s Small Town Near the Big City
Eisenhower Avenue
The Vibrancy Might Take a Few Years
The Quiet Neighborhood By the Beltway
Old Town
Mayberry By The Potomac
132 Commerical-Free Acres
Downtown Falls Church
Staying the Same in the Midst of Change
Tysons Corner
Radical Change Could Be On The Way

See more Northern Virginia »


Profiles of 14 neighborhoods in suburban Maryland

Small-Town Living in the State Capital
Bedroom Community Gets Buzzing Cache
Cabin John
In With The New While Maintaining the Old
Chevy Chase
Affluence, Green Lawns and Pricey Homes
Downtown Silver Spring
Experiencing a Resurgence After a Bumpy History
A Suburb on Steroids
Rockville Town Square
Despite the Dynamism, Still Somewhat Generic
Takoma Park
More Than a Little Bit Quirky
A Foodie Magnet on the Verge of Change
Capitol Heights
Kudzu, Front Porches and Crime
Glass Half Full or Half Empty?
Mount Rainier
Artists, Affordable Homes and A Silo Full of Corn
National Harbor
A Development Rises Next to the Potomac
Riverdale Park
A Town Looking For Its Identity

See more Maryland »

Northwest DC

30+ neighborhood profiles for the city's biggest quadrant

16th Street Heights
DC's Sleeper Neighborhood
Where (Almost) Everyone Knows Your Name
AU Park
One of DC’s Last Frontiers Before the Suburbs
DC’s Northern Neighborhood on the Cusp
DC’s 535 House Neighborhood
Cathedral Heights
Do You Know Where That Is?
Chevy Chase DC
Not to Be Confused With the Other Chevy Chase
Cleveland Park
Coming Back After A Rough Year
Columbia Heights
DC’s Most Diverse Neighborhood, But For How Long?
An Island of Serenity East of the Park
Dupont Circle
The Best of DC (For a Price)
Foggy Bottom & West End
Where the Institutional Meets the International
Forest Hills
Ambassadors and Adventurous Architecture
Foxhall Village
350 Homes Just West of Georgetown
Friendship Heights
A Shopping Mecca With a Few Places to Live
History, Hoyas and H&M
Glover Park
One of DC’s Preppier and More Family-Friendly Neighborhoods
A Posh View From Embassy Row
LeDroit Park
A Quiet Enclave in the Middle of the City
Logan Circle
Trendy Now, But Not By Accident
Mount Pleasant
Sought-After Homes Surround Main Street in Transition
Mount Vernon Triangle
From Seedy to Sought-After
The Long, Skinny Neighborhood at the City’s Northwest Edge
Park View
It’s Not Petworth
Penn Quarter/Chinatown
DC’s Go-Go-Go Neighborhood
Getting a Vibrancy of Its Own
The Duke’s Former Stomping Ground
Shepherd Park
DC’s Garden of Diversity
Spring Valley
A Suburb With a DC Zip Code
Not To Be Confused With Takoma Park
Not Quite Like Its Neighbors
U Street Corridor
The Difference a Decade Makes
Woodley Park
Deceptively Residential
Adams Morgan
No Longer DC’s Hippest Neighborhood, But Still Loved by Residents

See more Northwest DC »

Southwest DC

The little quadrant that could

Southwest Waterfront
A Neighborhood Where A Change Is Gonna Come

See more Southwest DC »

Northeast DC

Profiles of 10 neighborhoods in NE

New Development Could Shake Up Pastoral Peace
A Little Bit of Country Just Inside the District’s Borders
Not to Be Confused With Bloomingdale
Fort Totten
Five Years Could Make a Big Difference
H Street
A Place To Party, and To Settle Down
The Northeast Neighborhood That Few Know About
Michigan Park
A Newsletter-On-Your-Doorstep Community
Evolving from a Brand to a Neighborhood
Ripe for Investment Right About Now
The Difference 5 Years Makes
Big Houses, A Dusty Commercial Strip and Potential

See more Northeast DC »

Southeast DC

6 neighborhoods from Capitol Hill to East of the River

Capitol Riverfront
Still Growing
Hill East
Capitol Hill’s Lesser Known Neighbor
Congress Heights
Gradually Rising
Notable for Its Neighborliness
Historic Anacostia
Future Promise Breeds Cautious Optimism
Eastern Market
A More European Way of Living

See more Southeast DC »