Will DC See Discounted Home Prices This Spring?

by UrbanTurf Staff


This morning, The Wall Street Journal reported that recently-released data regarding a sharp drop in existing home sales and median price nationwide combined with low interest rates could make for a spring season when home buyers will find bargains in markets across the country.

From the WSJ:

The silver lining [to this data], say economists, is that bargain prices, coupled with low interest rates, might finally spur some buyers off the fence as the real-estate industry prepares for its busiest season. Even without the $8,000 federal tax credit that stoked sales last spring, industry watchers predict a larger number of transactions this year.

While this news could be good for the country on the whole, DC buyers should not hit the pavement this spring thinking they will see deals at every open house they visit.

In February, the DC area had the largest year-over-year increase for pending sales of existing homes in a decade, according data released recently by RealEstate Business Intelligence (RBI). Specifically, 4,044 homes went under contract in the area last month, a 33 percent increase over February 2010 (3,041 contracts). This data is in stark contrast to the nationwide drop of 9.6 percent in existing sales reported by the National Association of Realtors recently.

David Bediz, an agent with Coldwell Banker in Dupont Circle, also noted that there are other factors that make a buyer’s market for the area seem unlikely. In addition to an average median home sales price that is 5.5 percent higher than a year ago, Bediz said that the inventory of homes on the market is particularly low right now.

“I can report all my buyers’ frustration that supply in the DC area is very low. They feel the supply of homes that are desirable to them at what they consider a reasonable price is virtually nil,” Bediz explained. “In addition, they feel that any home they do consider desirable that is priced well usually receives multiple offers and they almost always get outbid.”

This article originally published at https://dc.urbanturf.com/articles/blog/will_dc_see_discounted_home_prices_this_spring/3198


  1. East H said at 1:58 pm on Tuesday March 22, 2011:

    “In addition, they feel that any home they do consider desirable that is priced well usually receives multiple offers and they almost always get outbid.”

    Yep. Welcome to DC real estate. A lot of basket case houses, a lot of beautiful out of reach houses, and not much in between.

  1. Maggie said at 2:26 pm on Tuesday March 22, 2011:

    That last paragraph sums up my experience as a prospective homebuyer to a tee. It’s beyond frustrating out there right now.

  1. Janson said at 2:41 pm on Tuesday March 22, 2011:

    Wonder when the banks will dump all their foreclosures onto the DC market? And I wonder what a federal gov closure/furlough would do for demand? On the other hand, one big economic risk, $4+ gasoline, would probably be a big positive for District real estate. Guess I’ll just stay put…

  1. sgb said at 3:39 pm on Tuesday March 22, 2011:

    That last paragraph does indeed sum everything up.  And the fact that people are pricing property in gentrifying neighborhoods for what they will be worth in 5 years.

  1. Rob said at 3:51 pm on Tuesday March 22, 2011:

    The key phrase in Bediz’s quote is “priced well.”  When sellers are reasonable in pricing, the properties seem to sell quickly.  But there are also plenty of sellers who are asking peak-of-the-market prices and as a result, their properties sit on the market for months and months.  So there’s plenty of inventory, but a lot of it is priced unrealistically high, and thus there’s a shortage of properties that are priced well.

  1. Property Virgin said at 3:57 pm on Tuesday March 22, 2011:

    I definitely feel the frustration. As a first time home buyer, I thought I had a pretty decent income but what the heck do some of these people do to afford some of these places?!

    Apparently a 2/2 is much harder and more $ than I thought.  hmmm

  1. Mike said at 4:41 pm on Tuesday March 22, 2011:

    Piling on this one…so true for DC. Inventory is so amazingly low for good properties that when a good one comes on the market, it gets swarmed.  I visited a place that had come on the market 12 hours before, and there were already 20+ visits by the time I got there.  Needless to say there were multiple bids. This gets repeated every week. 

    I’ll probably rent again for a year, because I don’t want to drop 500+ large on something that I settled for.

  1. GS said at 10:43 am on Wednesday March 23, 2011:

    Funny . . . when I look at the comments in response to this article I could swear I am reading a cache of DC real estate related blog posts from 2003-2005, at the height of the market before the bottom dropped out.  The complaints are exactly the same - how can anyone afford these prices?  all the decent homes get swept up by multiple bids? everything is overpriced.

  1. Redline SOS said at 11:14 am on Wednesday March 23, 2011:

    Last paragraph nails it.  And local government is doing nothing to fix the problem.

    Oust your local leaders.  They ARE the problem.  Do you hear me Ike Leggett?

  1. Mike said at 1:11 pm on Wednesday March 23, 2011:

    GS…you are right.  I am struck by this same feeling.  the only difference is that it’s only DC and in many neighborhoods (I’m looking on the Hill), the inventory is so low, which is driving a lot of the behavior.  Maybe everyone is underwater/has low equity so can’t sell.  Cherry properties have been bid up 20-50k over asking…it’s seems odd.

  1. It's a Supply and Demand Problem said at 2:43 pm on Wednesday March 23, 2011:

    It is fierce out there. We have lined up two prospective buyers for our Silver Spring townhouse and have yet to even sign any realtor related paperwork.

    There are many people looking to move to the District to realize job security and to live in one of the hottest cities in the US. DC also isn’t Detroit nor is it New York where there are countless, deluxe apartments in the sky.

  1. Rob said at 2:56 pm on Wednesday March 23, 2011:

    Job security?  Wait until the federal budget cuts hit.  Then you’ll see prices start dropping here.

  1. roots said at 5:57 pm on Thursday March 24, 2011:

    Yes budget cuts will affect DC but you do know that the VAST MAJORITY (like almost all) of the federal jobs are way, way, way outside of DC. Like hundreds of miles.

  1. Tres said at 1:33 am on Friday March 25, 2011:

    It’s not a bubble, it’s gentrification. Gentrification affects well-to-do people. Just because you think prices are high, doesn’t mean they’re not fair. The truth is you got priced out. Gentrification is fast and ruthless.

    That and the fact (as someone mentioned above) that people can’t or won’t sell below a certain price due to equity issues. That’ll continue to put upward pressure on prices until all the boom-bought properties are cleared from the market. Seems like we’re about 2 or 3 years out from that, minimum.

    You also have to think about the fact that the surge of boom-buying effectively locked up the market of today, even absent a price breakdown. Even if all these people could sell today, the fact that greater numbers of people bought during the boom than are able to today (due to tighter lending policies, other factors) makes for a supply-demand mismatch. In RE, the people you’re buying from are people who bought 5 years ago or more. Today, we’re buying from the people of 2006 and before. There were more buyers in 2006 than there are buyers now. That’s the reason supply is so low relative to the demand. That’s why buyers are complaining.

  1. Tres said at 1:58 am on Friday March 25, 2011:

    Sorry, it’s late and I realize the last part of what I wrote doesn’t make sense. The idea is that even if the market didn’t crash, there are still years like 2007 where an outsized percentage of housing inventory was snatched up, and it’s not going to be available for at least another year or two. Hence, supply is withheld because of the frenzy of less than 5 years ago.


Comments are closed.

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 »

Upcoming Seminars ▾