It's no surprise that the last several months have seen massive change in the real estate market, driven primarily by dramatically rising interest rates. What does that mean for our local market? Let's look at a few different segments:
These days. "First time home buyers" is code for "long term renters". Every dollar counts for this group and consequently they are getting squeezed out of the purchase market. Homes under $1m in the DMV are sitting longer (an average of 32 days compared to the August 2021 average of 21 days) and the unit sales year over year are down 18.4%. Not surprisingly, this is the segment of the market where we are seeing the greatest increase in inventory.
Move Up Market
This segment is driven by tight inventory. The cost of "trading up" has risen dramatically with rising interest rates, and therefore discretionary sellers are deciding to stay put, at least for now. Makes sense. These families most likely have an existing mortgage with interest rates around 3%. Their next mortgage these days could easily be double that. Yikes! That being said, there are still more buyers than sellers, and nice homes are still receiving multiple offers in a weekend.
Interesting enough, this is the segment where we are personally seeing the most activity. There is still a backlog of buyers, and in these price ranges the buyers have financial resources to weather the higher interest rates. We've been involved in several transactions in the last few weeks, all priced above $3m and all of them were competitive.
Bottom line is that prices have generally stabilized. Even though starter homes and less desirable homes have fallen3-5% in last few months, nice homes are still selling briskly at peak value. Inventory remains tight, but we think that will loosen up as families adjust to the new interest rate environment.
If you're feeling discouraged by low turnover, we like to point out that home sales are like hair cuts. Families can delay the decision for a while, but at some point, you just have to bite the bullet. After all, life events that precipitate a move still happen, including marriages, babies, promotions, relocations, divorces, and more. So if you're feeling a little shaggy, and ready for a move, please give us a call. We're here to help.
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Wydler Brothers have been selling residential real estate for over 20 years in the DC metro area. Along the way, they’ve achieved numerous awards and recognitions, including being recognized as “The Most Innovative Real Estate Agent in America” (Inman, 2014), written several articles for The Washington Post, authored a book, “Inside the Sell”, co-founded a real estate tech company which sold to Move, Inc. in 2013, and built Wydler Brothers into a highly respected boutique brokerage with 70 agents and employees which they sold to Compass in 2019. Currently, Wydler Brothers is among the top 3 teams in the DMV and was the #1 Compass Team in 2022.