The DC-area housing market has entered the ninth year of a severe shortage of homes for sale and a stark milestone came in December of just how bad the situation has become: there was a mere one-month supply of homes on the market.
Specifically, there were 4,761 homes for sale in the DC area in December, down 13 percent compared to 2019 and the lowest level for the region on record. The lack of homes for sale in the region has been an ongoing issue for the last decade and only seems to be getting worse.
As UrbanTurf has noted over the years, the standard benchmark for a balanced housing market is a six-month supply of homes for sale. What that means is that if no new homes hit the market, the supply of homes for sale would run out in six months.
The last time DC proper had a six-month supply of homes for sale was almost 12 years ago; inventory hasn't been above three months since July 2012. The new normal for the city is closer to a two-month supply, which the city has hovered around for years.
The DC region has been on a similar trajectory, as the graphic above illustrates. In addition to fewer homes hitting the market, buyer demand is also a factor. The contract ratio for the DC area, the total number of homes under contract in a given period compared to the overall number of active listings, hit 1.0 for the first time in December, meaning that, on average, there was a buyer for an active listing on the market that month.
With the spring market around the corner, it will be interesting to see how the supply and demand dynamics play out.
Thumbnail photo of a home on the market in Arlington by HD Bros.
This article originally published at https://dc.urbanturf.com/articles/blog/the-dc-areas-9-year-housing-supply-drought/17856.
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