High mortgage rates and extremely tight inventory have worked together to slow home sales in the D.C. region this year, but there are still buyers and prices are still rising modestly.
The housing market has had a solid run since the last market crash — but the run might be due for a break.
Veteran D.C.-area real estate agent Corey Burr, who works at TTR Sotheby’s in Chevy Chase and has more than 30 years in the local residential real estate business, says he has seen this market behavior before.
“I’ve always followed a theory that real estate runs in 16-year cycles from peak to peak, and then eight years down to a trough,” Burr said. “Our last peak was in 2008, and when I add 16 to that, it means the next peak is really right now, and in 2024.”
Burr added, “I anticipate we will have a number of years with sideways activity, and it might be that we give away some of the profits that people made during the pandemic years, which were truly exceptional.”
Predicting the future of any housing market based on current or historical trends doesn’t always get it right, and Burr said there is a dark side that could be looming.
“The worst-case scenario is that inflation proves to be much more difficult to tame, and interest rates increase to 8% or 9%,” he said. “In addition to that, if inventory remains low we are going to have a market freeze where not much goes on in real estate for an extended period of time in that kind of environment.”
The best-case scenario for the housing market, both locally and nationally, would be for the Federal Reserve to begin lowering its benchmark interest rate, bringing mortgage rates down, and for the economy to avoid a recession.
