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Fierce Competition, But Pickier Buyers: The Climate of the DC Housing Market
The 1700 block of Corcoran Street in Dupont Circle is a microcosm for the current climate of the DC housing market.
Earlier this month, real estate agents Martin Toews and Jeff Briers sold a two-bedroom rowhouse above a tenant-occupied one-bedroom unit for $150,000 above its listing price in an all-cash offer with no contingencies that beat out seven other bidders. Toews and Brier also have a one-bedroom condo on the same block under contract at a record price for its building, in another all-cash, no-contingency transaction that garnered eight offers. Kara Johnson recently sold a one-bedroom on the block for $45,000 above its asking price after attracting seven offers and 52 showings in the four days that it was on the market.
These types of transactions have characterized the DC housing market for years, and in 2019, fierce competition remains a major factor as the area deals with the pressure of low supply.
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While the lack of homes for sale works in sellers' favor, real estate professionals are telling UrbanTurf that buyers are now wary of over-confident sellers.
"My observation is that the market rewards value and ignores properties that are even slightly overpriced," Melanie Hayes of TTR Sotheby's International Realty said. "Buyers are extremely well informed and are able to quickly determine if they see value. If they do, they will move quickly. Clients of mine largely ignore anything they see as being overpriced."
Anacostia River Realty's Darrin Davis has observed the same, noting that while the housing market in Wards 7 and 8 has remained relatively affordable compared to the rest of the city, properties do languish on the market due to inflated pricing. Davis points to the most expensive listing east of the River, a $799,000 five-bedroom house in Deanwood, initially priced earlier this year for $1 million.
Despite the competition that has characterized the early spring market, the tide may be turning in favor of buyers, as a recent increase in housing inventory has given them more wiggle room. Andrew Strauch of Bright MLS notes that there was a 7.3 percent increase in supply and 1.2 percent increase in new listings in DC proper last month compared to March 2018.
"It looks like the DC spring market will bring more choice to consumers than past years," Strauch observed.
An abundance of new condo options is also expected to drive up buying activity.
"Due to low levels of inventory, buyers haven’t been able to find what they have been seeking," Urban Pace president Clint Mann told UrbanTurf. "All of that pent-up demand is unleashed as larger projects with the right product are released." Mann said that the recent grand opening of the eNvy condominiums next to Nationals Park drew more than 300 potential buyers.
Dan Metcalf, an agent who focuses on the Takoma Park market, has observed the beginning of a shift.
"While about a month ago I had a few homes sell with half a dozen offers and escalations of up to 10 percent of the sales price, two of the three homes I put on the market recently sold, in one case via presumptive bidding and in the other with three offers," he explains. "So you get the sense that while everyone is still feeling that sense of urgency, a little more inventory may be spreading the buyer pool a little bit."
The uptick in inventory not only offers more options to buyers, but also encourages homeowners to list with the confidence that another suitable home will be available for them. Additionally, between moderate price growth in DC, a year-over-year increase in new pending sales in February and March and a noticeable drop in interest rates, chances are increasing for a healthier and more active housing market in the upcoming months.
This article originally published at https://dc.urbanturf.com/articles/blog/pent-up-demand-and-pickier-buyers-the-state-of-the-dc-housing-market/15283.
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