The spring housing market is around the corner and potential buyers, sellers and real estate agents are all heading there with uncertainty. But signs point to more for sale and more bargaining power for buyers.
More for sale doesn’t necessarily mean more home sellers, but more residential properties sitting on the market longer. In January, the typical home that sold had been on the market more than twice as long as sales from a year earlier.
“Thirty days is now the typical days on market. That means we are going to start to see inventory buildup as these homes linger on the market — and that will bring more choices for buyers as we head into the spring,” said Lisa Sturtevant, chief economist at mid-Atlantic listing service Bright MLS.
That inventory buildup has already started, as the number of active listings in the D.C. metropolitan area in January — 5,177 — was 42.4% higher than January 2022, according to Bright MLS data. New listings, or potential sellers coming on the market, were actually down 12.5%.
One measure used by the residential real estate community for inventory is known as “months of supply” — or how long it would take to sell every currently-listed property. The “months of supply” figure is currently 88.9% higher than it was a year ago.
“You are going to find a little bit more choice. Buyers are certainly going to have more leverage, both on price, as well as asking for seller concessions around home inspections or even closing costs,” Sturtevant said.
Bright MLS tracks what it calls its “Home Demand Index” monthly, a measure of buyer interest based not on recent closed or pending sales — but on things like real estate agent showings and Internet searches for homes for sale.
While that index rose modestly this month, it was still considerably lower than a year ago, indicating relatively slow market conditions.
In-person showings by real estate agents in January were down 32.9% from a year ago.
Looking ahead to spring, Sturtevant said she expected the strongest markets for sale in the D.C. area will be in the wealthier suburbs, such as Fairfax and Loudoun counties in Virginia and Montgomery County, Maryland.
“In the suburbs, you have more folks who are repeat buyers and higher income buyers, and bringing equity to the deal,” she said.
The likely market rebound this spring reflects what Bright MLS called a growing acceptance of the “new normal,” which includes higher mortgage rates and longer transaction times.
Below are median selling prices and year-over-year change, in the D.C. metropolitan area, courtesy of Bright MLS.
