In this spring of 2013 the real estate market was alive and kicking. Prices were ascending, and houses were moving pretty quickly. For many people, spring 2014 proved disappointing in comparison, but long term trends are the more important indicator, and we have good news there.
The five-year trend shows median prices in the D.C. metro region moving upwards, according to data compiled by Real Estate Business Intelligence (RBI data is used for all charts in this post). The first chart here shows the upward trend for median sales prices for the past five years, which offers a silver lining after a slower-than-expected spring.
Still, market activity has slowed the first half of this year compared to the first half of 2013, with the median sales price for the entire region dipping from $440k to $433k. RBI points out that closed sales are down 4.5 percent for this period as well compared to the same time last year.
Data for individual regions offers good news for sellers in many areas, along with some price reductions in others. At the high end, Falls Church City is up 7 percent this year compared to the same time last year. On the low end, Alexandria is down about 3 percent, but Alexandria’s five year median price trend is still positive. Low inventory and few sales (particularly in Falls Church) should temper the significance of the aberrations in Alexandria and Falls Church.
After Falls Church, Washington D.C., comes out on top, with an impressive 4.6 percent increase in median sales price.
The average number of days it has taken to sell homes is down for most areas, with the exceptions of Alexandria and Fairfax County, where the average time to sell a home has increased by 12 percent and 14 percent respectively. In Alexandria, average days on market increased from 41 to 46, while in Fairfax County, days on market increased from 36 to 41.
Given these realities, homeowners trying to sell homes this summer should focus on setting a price as close to market value as they can, which is usually a good idea anyway. Homes with overly ambitious prices are likely to sit on the market a long while and may eventually sell for less than they would had they set the price competitively from the outset.
The big question remains: Where is the market heading? Zillow predicts that the national real estate market will continue to slow down, particularly if interest rates go up, suggesting that now is a better time to sell than waiting until next year.
But Zillow competitor Trulia says that houses are still under-valued, leaving room for an upswing next year. And they see no concern about a new bubble emerging anytime soon.