What to expect from the DMV real estate market this fall
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Lower interest rates are luring buyers back into the D.C.-area real estate market after a slow summer, but don't expect the local housing market to change all that much this fall, agents tell Axios.
The big picture: Mortgage rates have eased this year, providing some relief to would-be buyers.
- This comes after 2023 saw decreased inventory and sales in the D.C. region as people sat on the sidelines — potential buyers waiting for rates to fall or sellers holding onto low pandemic-era rates.
State of play: While DMV inventory is slightly increasing as people reenter the market this fall, it's still low overall — meaning competition and prices remain high, agents tell Axios.
- It's the same song and dance: Any house that's priced well in a desirable neighborhood around D.C. will probably go quick, meaning you'll likely need to put in a competitive offer and waive contingencies, say agents.
- To put it bluntly: "It's slim pickings," says Greater Capital Area Association of Realtors vice president Christopher Suranna.
What they're saying: "We're not talking about major sea changes," says agent Joe Himali of his fall forecast for the DMV real estate landscape. "We're just seeing a slow rebalancing of our market."
- That means some people are making peace with reality and jumping back in.
- "If you've been waiting on the sidelines, you're like, 'Things are only going to get more expensive. At least the mortgage rates have come down, so let's buy something,'" says agent Kate Bohlender.
Yes, but: Though it's not a buyer's market, sellers aren't running the show, either. Gone are the COVID-era days when those listing had the upper hand.
- "[You] can't be greedy as a seller, because buyers are savvy to that," says Bohlender.
Between the lines: Despite new rules regarding commissions determined by the NAR settlement going into effect this summer, many agents tell Axios they're still seeing D.C. sellers offer compensation to the buyer's broker.
- In some cases, though, it's being used as a bargaining chip, with buyers and sellers negotiating who pays the buyer's fee.
The intrigue: Some agents are seeing buyers and sellers take a cautious wait-and-see approach before the election, they tell Axios.
- Former President Trump's talk of downsizing government agencies during a potential second administration could disrupt D.C.'s economy and the livelihoods of local federal employees.
"People are very concerned … because depending on what the outcome is, [it] could dramatically change the fortunes of the federal government in D.C.," says Himali.
- Suranna adds that he's hearing some concerned locals are planning to sell their DMV-area homes and move should Trump be elected.
Plus: As D.C. crime numbers have dropped, Himali has seen a renewed interest in downtown properties after a previous decline.
- The decision to keep the Wizards and Capitals downtown at Capital One Arena and Mayor Muriel Bowser's revitalization plans for the area have helped increase interest, too, he says.
The bottom line: "Everybody still wants a perfect house," says Bohlender.
What we're watching: What happens with the election, interest rates and area affordability.
- Bohlender doesn't see area home prices coming down anytime soon, especially if interest rates continue to lower and more buyers hop into the pool. "That's just basic supply and demand."