D.C. homebuyers and sellers hop into spring market despite high rates
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Spring is officially underway in D.C., and homebuyers and sellers who spent the past year sitting on the sidelines due to high rates are now facing the music and diving in.
Why it matters: Inventory is inching up as people forge ahead, but the market is still tight due to pent-up demand built over the last year, agents tell Axios.
The big picture: 2023 saw decreased DMV inventory and sales as people held on to homes — because they were locked into pandemic-era rates or were hoping rates would lower — in turn largely upping prices and competition.
What they're saying: "You're just biting the bullet and you're doing it," says agent Alison Scimeca of locals deciding to buy or sell despite steadily high rates.
- This trickle back into the market means increased competition for single-family houses and townhomes, with waived contingencies, multiple offers, and people gunning to find off-market listings, says agent Koki Adasi.
Prices will likely either rise or stay stable due to low inventory and pent-up demand, says agent Joe Himali. The median sale price for the D.C. area was $560,000 last month — up from $535,000 in February 2023.
- To get into the market, first-time buyers are relying heavily on family support or purchasing homes with friends, says Adasi. "[They're] trying to bring together their resources to make homeownership a reality. But it's really challenging."
The intrigue: D.C.'s condo market continues its pandemic-era slump, as people still crave space, work remotely, and are deterred by pricey HOA fees, agents say.
- Condo inventory is high (up 19.4% year-over-year as of last month), and they're sitting on the market longer — giving buyers the upper hand. "If you're a seller of one of those, you need to be prepared for a slog. You just have to take the price you get," says Himali.
D.C.'s urban core is also increasingly less popular with buyers due to city crime, agents tell Axios.
- "The center of the city has gone cold," says Himali, referencing neighborhoods like H Street, Shaw, and Columbia Heights. Instead, he's seeing steady interest around inside-the-Beltway 'burbs and walkable areas farther out like Reston or Tysons.
Yes, but: That's not to say people are avoiding the city — Scimeca just worked with a client looking to buy in NoMa or Eckington.
- And D.C.'s crime numbers are down in 2024 compared to the same time last year.
One hot take: People want color: Expect to see a design pivot from the long-dominant, HGTV-esque sterile neutrals to rainbow interiors.
- "Gray is the new avocado," says Himali.
What's next: More of the same, probably — Scimeca anticipates rates dropping a bit by the end of the year, but not enough for a major impact.
- "Marginal changes are probably the watchwords of the next 24 to 36 months," says Himali.
The market tends to slow come summer, and agents expect it will also slow as locals take a "wait-and-see" approach before the election.
What we're watching: The NAR settlement's potential market impacts.