The District posted an astounding $603,375 median sales price for the month of June, marking the 6th consecutive month of price increases. June surpassed May by only 2.3%, but when looking back to pre-recession levels, DC’s prices have increased over 35%! As sale prices continued to climb, the city experienced a 1% drop in sales activity YoY with 890 closings. DC was not alone in this trend, as every locale within the region experienced fewer closings. The decline in sales for DC proper was not concentrated within one property type, as all detached homes, townhomes, and condos failed to improve over last June.
Arlington County, VA
Arlington was a bit of an outlier for the region in June, being only one of two jurisdictions within the Metro to see a decline in median sales price. The county saw more than just a slight dip, with sales price depreciating 16% YoY to $525,000 for June. Arlington also had the third most significant decline in closings at 6% YoY. Active inventory has remained flat in Arlington compared to May of this year, while sales price was 7% higher in that month. This is not the first time we’ve seen such volatile activity around this time of year; children are out of school, graduation parties are happening, and families finally have time to take that summer vacation. I expect sales activity to pick up slightly as the summer comes to a close and kids are back in school.
Fairfax County, VA
Similarly to DC and the overall Metro, Fairfax County posted an improvement in sales price combined with a reduction in closings. Median sales price reached $545,000 for the month of June, a decade-high figure for the county. June was also the first month in over 10 years that Fairfax County’s median sale price surpassed that of Arlington County. Closings decreased 4.3% YoY with all property types experiencing a decline in activity. Condo sales suffered the most in June, with only 320 closings compared to 370 last year (-13.3%).
June was the continuation of a recent trend within the DC Metro consisting of constrained supply limiting sales while driving buyer competition and bidding wars. This was the 21stconsecutive month of YoY price increases while also being the 26thconsecutive month of inventory declines. For almost two years these figures have been trending in opposite directions, creating a cyclical uphill battle for buyers that only an influx of supply can solve. We may see the tables turn as construction activity throughout the region is expected to increase throughout the year. Some experts, such as Delta Associates, estimate as much as a 100% increase over 2017 for the condo market alone, while Dodge Data & Analytics ranks DC third in the country for most construction starts this year. Buyers and developers alike are hoping to meet each other’s needs and break the cycle, or at least narrow the gap throughout the region.