With the first day of fall arriving next week, a new seasonal housing market is just around the corner. Today, UrbanTurf looks at what we think will be the metrics that will determine the direction of the DC-area market in the coming months.
Home prices in the region have been hitting new highs on an almost monthly basis for the last year. However, there are early signs that they may have peaked. In recent months, prices are still rising but not at the breakneck pace that they were previously. UrbanTurf believes that homebuyer fatigue with the unrelenting increase in prices will be reflected in the coming months as median values start to flatten a bit.
A year ago, there was about a 1.5-month supply of homes for sale in the DC region, historically one of the lowest inventories on record. In August, that inventory had dropped 28% year-over-year to about a month's supply. Listings will likely increase this month, but buyers are also resuming their search after taking August off, so there isn't any indication that there will be relief from the chronic shortage of homes for sale that has plagued the market for years.
The chart above reveals the one metric that will play the biggest part in the path of the housing market over the next three months. Pending home sales (homes that have gone under contract but not sold) had risen for 26 straight months coming into July 2021. But for the last two months, those sales have been dropping and the reasons might be the other two metrics mentioned in this article.
Thumbnail image of a home on the market in Takoma Park.
This article originally published at https://dc.urbanturf.com/articles/blog/the-3-charts-that-will-define-the-fall-housing-market/18713.
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