As fall approaches, there are a number of questions floating around about the DC area housing market. Will the tight inventory in the for-sale market continue? Will the slew of new apartments entering the rental market push rents down? Will the effects of sequestration become more noticeable?
With these questions in mind, each day this week UrbanTurf will be hearing the predictions and trends that local industry professionals believe will play out in the fall market.
A Subtle Shift in Favor of the Buyer
By Lindsay Reishman, Founder of Lindsay Reishman Real Estate
This fall, the DC area market will make a subtle shift in favor of the home buyer. To be clear, it will still be a seller’s market, but we’ll move toward an equilibrium that will be fully realized in the market in 2014. The market over the coming months should still feel very competitive, but there are already signs that the feverish bidding war climate is subsiding.
In the peak of the spring market, listings that were priced accurately and showed well would get about 35-40 showings and 5 offers. As the summer progressed, we saw the showings remain constant, but we would get about half as many offers versus earlier in the spring.
As the fall market begins, I think buyers will continue to grow a little more cautious due to higher prices and slightly higher interest rates. The slowly increasing inventory, as illustrated in the chart above, is already a reflection of this taking place in the market.
Cash Is King in the Luxury Market
By Michael Rankin, Managing Partner of TTR Sotheby’s International Realty
Of the 345 homes that sold for over $2 million in the DC region over the last year, 37 percent were paid for with cash. Under the $2 million threshold, only 16 percent of homes traded in cash deals. I see the prevalence of all cash transactions in the market’s high-end sector continuing in the fall months.
Apart from financial capability, luxury buyers are more frequently paying in cash because they are considering real estate to be a critical part of their overall financial strategy. Cash buyers are market savvy, often commissioning home inspections or appraisals before submitting an offer They find investing in real estate to be more productive than the stock market, which remains volatile. DC’s low inventory of homes for sale coupled with our strong economy is pushing housing prices up and in many neighborhoods real estate is appreciating faster than other investment alternatives.
From a seller’s perspective, an all-cash offer implies capability and credibility. If multiple offers are presented, a seller might choose a cash offer at a lower price if the gap between the two offers is minimal. Cash simply reduces the risk that the purchaser won’t close on the property and can offer reassurance to the seller for a timely closing, allowing them to plan their next move with confidence.
See other articles related to: dclofts
This article originally published at https://dc.urbanturf.com/articles/blog/fall_market_predictions_cash_is_king_and_a_buyers_market/7503.
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