Washington, DC Condo Market is HOT

April 21, 2012

Ask agents in Washington, DC about the market for condos and co-ops right now and they will respond that the market is hotter now than it has been in many years and that multiple offers and pricing strength are common. While that might seem like hyperbole or wishful thinking, it’s not. The numbers bear out the perception. The Greater Capital Area Association of Realtors have released the March 2012 condo and co-ops statistics, here's a link to them: http://bit.ly/IpGjY6   Like all markets, the real estate market is driven by supply and demand. This spring supply is far down and demand is up.   Supply The market for condos is the lowest it has been since 2005. As of the end of March there was a 27.9% drop in available homes on the market from a year ago (833 vs. 1,156). Interestingly, the inventory is down 50.5% from the peak of inventory in June of 2006 (833 vs. 1684).   Perhaps more important than the percentages is that this low level of inventory indicates that inventory is likely to remain tight for the rest of 2012. That’s because in Washington, inventory of available homes increases to the highest level in the spring and declines throughout the year to a low level in December. This year the increase in inventory is 43% of what it has been for the last six years. (Typically, inventory rises 23% between December and March, this year the increase has only been 10%.)   As one other point of reference, the last time inventory was this low in the spring was in 2005, which was the peak of the market in Washington, DC.   Demand The demand side is a little more nuanced than the supply side, but the news is good here too. Contracts were up 18.2% compared to last year for the same month (358 vs. 303). This is the first time since June 2008 that we’ve had this level of contracts (without government intervention).   The government intervention I’m referring to is the $7,500 federal tax credit for buyers of homes that ended in April of 2010. In March and April of 2010 contracts exceeded 350 as buyers rushed to close before the end of the credit.   Bottom Line So with supply down and demand up, what does this mean? It means that we’re seeing the market price for properties firming up, but not great price appreciation. The reason the properties are clearing quickly and demand is up is because sellers have finally capitulated and are pricing their homes where buyers want them.

Comments

  • Hmmm...these kinds of stats are pouring in from all regions...seemingly up to a certain price point. Perhaps the luxury market/the secondary home market has yet to bump up into same rhythm in the upper tier options?

    Liane ("Li") Read — April 22, 2012

  • I don't know about the second home market, but I'll be posting some information on the luxury market specifically for DC soon.

    Joseph Himali — April 22, 2012

Share this post

Click here!

Joseph Himali

LRE® Profile More Blog Posts Save Favorite

My Website

Archives

Recent Blog Posts

Eloquent In Eastpointe! 

Echo Fine Properties, Echo Fine Properties — Jul 14

Virtual Tour- Kolea Villa 9L

Hawaii Luxury Listings, LLC, Hawaii Luxury Listings, LLC — Jul 13

Park City Real Estate is on Fire-How to Win in a Multiple Offer Situation

Mary Ciminelli, Summit Sotheby's International Realty — Jul 13

VALIA Properties Ranked #2 in Orange County

VALIA Properties, VALIA Properties — Jul 13

For Sale: Malibu Beachfront Condo 1991 Sq Feet Of Ocean Views

Tina Lucarelli, Rodeo Realty — Jul 13

Twitter