October 26, 2016 | Josh Sullivan
DC Metro is having a difficult time keeping up with demand. While closings continue to climb, we are seeing active listings and inventory slipping in almost all submarkets. The District, however, is seeing condo sales at their highest level since 2007.
Record Median Sales Prices but Low Inventory
While the past few months have proven to be successful for sellers, we are seeing a slight change in supply for the DC Metro real estate market. We have seen record median sale prices, contracts, and closings recently, but no mention of the declining inventory for prospective buyers. The number of active listings for September was 14.3% lower than last year at 11,102 and well below the 10-year-average of 15,210 listings.
With inventories at this level there must be a reason. Could it be that just one sector suffered tremendously, thus skewing the metrics? Unfortunately, it is not that straight forward, as all property types saw a decrease in inventory over last year. The most significant decrease we saw was with townhome inventories down 19.7% from last year, followed by single-family detached and condos down 13.8% and 11.1% respectively.
With all property types declining in inventory, you might think that the decline is a result of location? Wrong again. All jurisdictions in the DC Metro area saw declines in inventory levels, except for Falls Church City, where they rose 2.9%.
Although inventory levels in the District were only slightly lower than last year, Arlington and Fairfax County saw significantly lower levels than years past. Alexandria City had the most significant decline, with an inventory of 463 compared to 575 listings last year. Fairfax County was not too far behind, with 3,625 active listings causing a 18.1% decrease from last year.
Despite low inventories and restricted supply, DC Metro area condo sales are not showing signs of slowing down. Overall, condo sales are up 22% region wide over the past year – a level not seen since 2007. We saw significant improvement in areas such as the Capitol East sub-market, in which sales rose 125% from last year.
Median Sales Price September vs. August
With increasing sales in the DC Metro, it is important to look at other metrics such as median sold price and days on market.
In Washington D.C., the median sold price in September was $535,000, compared to $500,000 in August. This is a 7% increase from August and a 4.5% increase from last September, when the median sold price was $512,000. We also saw the median days on market rise to 16 days in September. This is a 6.7% increase from August and a 14.3% increase from last September, where the median days on market was 14 days.
In Arlington County, VA the median sold price in September was $512,000, compared to $540,000 in August. This is a 5.2% decrease from August and a 11% decrease from last September, when the median sold price was $575,000. The median days on market for Arlington County was 28 days in September, improving 6.9% from last September when the median days on market was 30 days. Though this was an improvement from last year, the median days on market for August was 27% lower at 22 days.
In Fairfax County, VA the median sold price in September was $460,000, compared to $486,000 in August. This is a 5.5% decrease from August and a 1.6% decrease from last September, when the median sold price was $467,000. We also saw the median days on market for September reach 28 days. This was a 12.5% improvement from last September, when the median days on market was 32 days. Unfortunately, 28 days on the market was a slight increase from August, when the median days on market was 26 days.
With decreasing supply and demand continuing to improve, it is becoming an increasingly competitive market for buyers. At this point it is unclear what is causing the declining inventory levels for the DC Metro area, but it’s not necessarily a bad thing if you’re a seller. It seems as though record days-on-market and above asking price offers are here to stay, for a little while at least. We will have to see if the trend continues in the next few months or if it was a brief bump in the road.