With a global pandemic, millions of Americans out of work and an economy that has been the worst in decades, it seems counterintuitive that the housing market — particularly in the D.C. region — remains incredibly strong.
Record-low mortgage rates, low down payment options, and D.C.’s still measurably strong economy, coupled with lack of enough inventory for sale has led to a 25% increase in sales activity regionally in 2020 compared to 2019. That’s even with the near closure of the economy between March and May.
And all of that also makes it an extremely competitive market for potential buyers in the D.C. area, even in December, usually a slow month for sales.
“In Takoma Park, there were 22 offers for a house. In American University Park, there were multiple offers on a listing, and the property jumped from a list price of just under $1.3 million to a sale price of just over $1.4 million,” said Corey Burr, president of The Burr Group with TTR Sotheby’s in D.C. “In Chevy Chase a property jumped from just under $1.1 million to just over $1.2 million. And in Bethesda, a property sold for just over $1.2 million after being listed for $1.05 million. Those are all in kind of a tight price range, but it is happening in all price ranges.
He added, “The brisk activity at the lower rung of the real estate ladder in the Washington region has led to owners on the higher rungs being able to trade up, knowing they have confidence that their existing property will sell.”
The strong pace of sales currently is also during the historically slowest 60-day period for residential real estate, between Nov. 15 and Jan. 15.
Burr, who has been in the residential real estate business for 34 years, said it is a highly unusual housing market right now, but not unheard of, pointing to similar activity in the late 1980s and then again between 2002 and 2007.
“I have a belief that markets run in a 16-year super-cycle. And that’s what we are facing right now,” he said.
Burr predicts with the local economy continuing to bounce back, vaccine distribution beginning and the Federal Reserve signaling interest rates will stay low and untouched until at least 2022, the D.C.-area housing market will continue to be quite strong for at least the next couple of years.