The May housing market in the DC region was characterized by the same trends that buyers have been seeing for more than a year: elevated interest rates, high home prices and limited inventory.
The combination of these factors has resulted in a peculiar market, one where sales are notably lower than last year, but buyer competition is still surprisingly high. And that competition could increase in the coming months due to what Bright MLS Chief Economist Lisa Sturtevant calls the "shadow buyer".
"Typically, the housing market slows slightly in the summer months, as many buyers and sellers are more focused on pool time and vacations," a Bright MLS report on the May market stated today. "This summer could be different, however. There is potentially a group of 'shadow' buyers who are waiting in the wings, watching for mortgage rates to come down. When rates do fall, these opportunistic buyers are not going to wait if they find a home they love."
While buyers might be ready to pounce, the big question that remains is will inventory increase if interest rates drop. There were approximately 5,570 homes on the market at the end of May, a slight increase compared to April; however, active listings remain significantly lower when compared to 2019.
"Single-family home inventory today in the DC area is only one-third of May 2019, and attached townhouse and condos are 50% and 69% of 2019 levels," according to the Bright report.
Photo Courtesy of Peter Papoulakos
This article originally published at https://dc.urbanturf.com/articles/blog/will_this_be_the_summer_of_the_shadow_buyer/21133.
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