August was a bit of an anomaly for the District, having an increase in new listings while median sales price dropped. DC proper was the only region within the Metro to report a drop in median sales price, resulting in a 5% decrease YoY to $545,000. While prices dipped slightly, closings in Washington improved across all property types. A total of 835 homes sold in August, with condos leading the way at 387 closings, up 8.7% YoY. Not far behind were townhomes and single-family residences with 318 and 130 sales, respectively. Though demand rose, we still saw sales price drop, which at first glance doesn’t seem to add up. Looking at new inventory levels for August might shed some light on the situation. 816 new homes were put on the market in August, over 7% more than last year. With a sudden rise in new listings, sellers are incentivized to lower prices in order to secure a slight competitive advantage over similar listings.
Arlington County, VA
While DC had an unusual amount of activity during August, Arlington continued the trend of fewer closings resulting in higher sale prices. Median sales price increased 1% YoY to $545,000, coupled with only 261 sales across all property types. Townhome sales experienced the most significant drop in activity, down 22% YoY with only 18 closings. Condo sales dropped as well, posting 7% fewer sales with 145 closings. Single-family residence sales increased 3.2% YoY for August, but that wasn’t enough to offset the drop in sales activity for condos and townhomes.
Fairfax County, VA
Fairfax experienced similar changes as Arlington, but on a larger scale. Median sales price improved 4% YoY reaching $505,000 across the county, while closings declined 7%. The majority of closings were concentrated within single-family residences, with 758 for the month of August. Townhome sales dropped to 390 for the month, while condo closings remained unchanged YoY.
Many believed the market was poised to slowly transition towards a buyer’s market after July, but August quickly brought us back to reality. Every few months unusual market activity shows a glimmer of a buyer’s market within the Metro, but quickly reverts back to the status quo of ever-increasing demand.
Though we are still very much in the throes of a seller’s market, inventory levels will be something to keep an eye on. There continues to be a push for increased construction in the region, but rising material costs and labor shortages are holding back builders and developers. This problem is not unique to the DC Metro, as metropolitans across the country are facing similar challenges.