The competition for homes continues to be fierce in the Washington region, but a close look at the numbers show one property type is more sought after than others.
“I would say that the hottest market is the entry level single family home,” said Eldad Moraru with Compass Realty.
From smaller detached homes to townhomes, Moraru said these types properties are going off the market the quickest in the D.C. region. And they’re seeing the biggest bidding wars.
This is evidenced by absorption rates, which Moraru said is a ratio that divides the number homes up for sale to the number of contracts for a homes signed in a month.
“If you have an absorption rate of a month and a half, that simply means if no new inventory, no new listing came on at all, at the current rate, all those listings would be gone in a month and a half,” Moraru said.
Using absorption rates, Moraru said the housing market as a whole can be split into smaller more specific segments and give you a clearer picture of how much competition can be expected for a specific home type in the area where you are looking to buy or sell a home. It can also help you make better decisions on what to offer in a bid for a property.
“What one buyer or seller or buyer might experience in one market, might not hold true in a market you are looking at,” Moraru said.
He said the current absorption rate for single family homes is just under a month in D.C., and just over a half a month for Fairfax County in Virginia and Montgomery County in Maryland.
As for condos, they’re sitting a bit longer in with an absorption rate of 1.67 months in D.C., and just under a month in the Fairfax and Montgomery. Moraru believes the slower condo market is due in part to people moving into bigger spaces during the pandemic.
With condos, Moraru said one with more bedrooms may be moving faster than single bedroom units. Also, he said more sought after right now are condo buildings with outdoor space.
“You might see one bedroom condos sitting on the market, whereas a three bedroom single family home ends up with 20 offers and is gone in one day,” Moraru said.
Moraru does believe that, down the road, condos will be a hot commodity once again.
“I don’t know if that is in three months or three years, but once people psychologically get beyond this, I believe there will be a move back to condos,” Moraru said.
