Our friend Tim Savoy at Coldwell Banker Residential Brokerage in Dupont Circle writes an occasional column about the Washington-area housing market and here is what he recently had to say:
• The market boom will continue: As with previous years, inventory will spike once again in the fall. Most properties will go under contract during October with settlements highest in November before the holidays. From there, the Washington area generally begins its winter season where listings, contracts and settlements are lowest until the spring market.
• Interest rates will rise: The Fed last week opted against an immediate interest rate hike, but signaled one could come before year’s end. For buyers looking to a 2015 purchase, this means getting in the market soon and preparing to make the offer on a new home. Moreover, with the recent volatility in the stock market, many investors may turn to look at property in the fourth quarter of the year.
• Inventory will rise immediately: History has shown us that the boom in inventory occurs across all types of property. For single-family homes, the number of active listings has jumped from August to September. For example, 2013 saw a 21.7 percent jump in active listings (600 to 730 active listings) and 2014 saw a 14 percent jump (about 680 to 775 active listings). In the condominium and cooperative market, a similar trend is seen with a 25 percent increase in 2013 (560 to 700 units active) and a 10 percent increase in 2014 (680 to 750 active listings).
• Prices: So far in 2015, prices have certainly been up slightly from 2014 (as of August, average sales prices are up 2.5 percent to about $671,600 in the District). However, the fall market will not create a significant spike in the sales price. With more supply comes more competitive pricing for sellers. In turn, median days on market will likely drop in the most popular and desired areas of the city.
For homeowners who expect to sell their properties in 2015, but haven’t quite yet begun preparing it for sale, time is now of the essence. While winter may be a couple of months away, sellers should be much more targeted and prepared with a plan during the fall market because of its shorter duration.
For hopeful purchasers, the fall allows an opportunity to act fast. While supply increases in the fall, potential purchasers will also flood the market. Buyers should take advantage of the current low interest rates and lock in a rate now rather than testing the market to see if rates will drop.
Overall, 2015 has been a steady year of growth. The fall market will allow one final push for sales before a chilly winter and our 2016 forecast.
Thanks Tim!