In case you haven’t noticed, the Washington-area real estate market has undergone a dramatic change in the past few months.
Suddenly, the hottest seller’s market on record has begun to cool, and both buyers and sellers are trying to adjust.
“The sense of what is normal has changed,” says Susann Haskins, 2005 president of the Greater Capital Area Association of Realtors, which includes Montgomery County and the District.
“Today, we are seeing more price reductions, and fewer multiple offers from buyers. When there are multiple offers, they don’t exceed the asking price by much. Escalation clauses are less common now,” Mrs. Haskins says. “The most interesting thing I see right now is that there are more properties on the market and fewer homes selling. In Montgomery County, year-to-date sales are down 1.4 percent, but listings are up 30 percent.”
Overall sales in the Washington-metropolitan area were down 5 percent in August. The number of homes on the market was 21,300 — a 35 percent increase over last August.
“There has been a shift,” Mrs. Haskins says. “At first I thought it was just the usual seasonal change, the slowdown that happens every September and October. But there’s more going on than that. I think there is uncertainty regarding the economy. And, the truth is, you just can’t continue to sustain the kind of appreciation we’ve seen in recent years.”
The drop in sales and rise in inventory indicates that the region is moving away from the hot seller’s market we had just become used to. Sellers today don’t have the kind of leverage they did only six months ago, while buyers are enjoying the reduced pressure and competition.
“Because today’s buyers see houses sitting on the market, and see prices being reduced, they are willing to wait to find the right home,” says Mrs. Haskins. “Six months ago, buyers were afraid that if they didn’t buy right away, something else wouldn’t come along.
“So, we are beginning to see more balance in the market, which is healthy,” she says. “Still, we’re still a long way from a completely balanced market, or one that tilts toward buyers.”
Throughout the 1990s, the Washington region experienced a strong buyer’s market, with abundant inventory and slow sales. The past few years have been the opposite extreme, but one that sellers certainly enjoyed.
“Many sellers today are very anxious. They have in mind the spring market. But, now, the condition of your home and a competitive price are much more important than they were in the spring. These days, if a home sits on the market for two weeks, the seller is wondering: ‘What’s wrong?’”
Nothing’s wrong, of course. It’s just a changing market, one to which everyone will adjust before long.
Contact Chris Sicks by e-mail (email@example.com).
The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.