D.C.-area home prices have been rising for 13 consecutive years, and the pace has accelerated in the past three years. But the gains in selling prices here, while steep, pale in comparison to many other metro areas.
CoreLogic reports the median price of a home that sold in the D.C. metro area in March was up 9.9% from March of last year. The annual gain nationwide was 20.9% — the biggest annual gain in at least 45 years.
Gains have been even more dramatic in some other areas. In Tampa, CoreLogic says, the median selling price in March was up 32.5% from a year earlier, the largest gain among the 20 largest metros. Phoenix ranked second, with an annual price gain of 30.4%.
Part of it has to do with the number of people moving there.
“Some areas of the country have really seen tremendous population growth. For example, the Phoenix area has seen very high population growth, but the D.C. metro area is not one of those metros,” said CoreLogic economist Molly Boesel.
Another reason: When momentum began building in 2019, before the pandemic, area prices were already among the highest in the country, so smaller percentage gains have actually been among the largest dollar gains.
CoreLogic continues to rank the D.C.-area housing market as “overvalued,” but that does not necessarily mean overpriced.
A market that is overvalued is one in which home prices are at least 10 percent higher than the long-term, sustainable level, which is supported by market fundamentals such as household income (because homeowners use most of their income to pay for home mortgages).
“It does mean prices are a little high relative to incomes,” Boesel said. “One thing it does not mean is that prices will come down.”
Instead, being an overvalued market means the long-term fundamentals indicate price increases “might slow a bit,” she said.
CoreLogic does see rapid price gains slowing nationally. It predicts the annual increase will slow to about 6% by March 2023.
CoreLogic’s full March Home Price Index report is online.
