The real estate market in our area is in somewhat of a low point, certainly when looking back at the performance in the last 4 years.
In previous updates, we discussed and outlined the reasons that brought us to this point. Today I’d like to focus more on what I think will happen over the next few months and one or two silver linings I see in the current market.
But first, the numbers in a nutshell:
In 2021 between July 1 to November 15, there were 1,002 new contracts entered in all of Bethesda, Chevy Chase, and Potomac combined. (all types of properties, all price ranges).
In 2022, the number of contracts entered over the same period dropped to 747, and in 2023 declined further to only 609.
Similarly in NW DC, in 2021 the number of contracts entered (7/1-11/15) was 2,298, a dramatic drop to 1,626 over the same period in 2022, and a further drop to 1,428 in 2023.
In 2021 (same period), 1,213 properties were listed for sale in all of Bethesda, Chevy Chase, and Potomac. The number dropped to 948 over the same period in 2022, and further to 778 in 2023.
In NW DC, properties listed for sale July 1 2021 to Nov 15, 2021, stood at 3,862, then dropped to 3,082 over the same period in 2022, and 2,482 in 2023.
This silver lining is the main and most important contributing factor to the “price stabilization” (for the most part) across the region rather than what many feared would be a sharp decrease in property values. It is important to note that real estate is hyper-local and as such, some properties do better than others. The conclusions presented here are general statements based on the overall story the numbers tell us.
Here’s what I think will happen… the current market conditions are likely to remain the same for the next 4-5 months. Winter is upon us and I don’t see a whole lot of movement in terms of homeowners deciding to list their homes for sale before spring… I also do not think interest rates, currently hovering around 8%, are going to shift much. We’re looking at more of the same… low inventory but also low demand. A standstill.
I believe that come spring (March-April 2024) we will see a new wave of homeowners listing their homes for sale… too many have delayed the decision to sell, and a good number of them will wait no more. I also believe the smallest movement on interest rates, a drop by 1/2 a point to 3/4 point, will be enough to re-energize droves of buyers and push them off the fence back into the market… demand for homes will increase significantly (compared to current demand).
We may see multiple offers more often when it comes to single-family homes.
My advice to buyers – buy now if you can. Go out, look for the right property, and make an offer today. While the interest rates may be a bit high, you have a better chance of finding a seller willing to negotiate the price, perhaps help with buying down the interest rate, and you can always refinance down the line.
Our team at Galanti Group can help. We have access to unlisted inventory, we have the expertise and we can guide you through any market, protecting your interest and providing solid professional expert advice.
