Northwest inventory remains low as local houses fly off the market

Local Realtors are reporting a continued fast pace in the local market. (Brian Kapur/Current file photo)

Despite some Realtors’ concerns about Donald Trump’s presidency harming the region’s economy, the local real estate market has yet to show warning signs, with D.C. homes selling faster than this time last year as inventory remains consistent.

The average number of days on the market in the District dropped from 44 last March to 38 this March, according to data provided by ShowingTime MarketStats, based on listing activity from Metropolitan Regional Information Systems. Five years ago, the average duration was more than double this year’s figure.

The median sales price of D.C. residences rose 5.83 percent to $535,000 this year, compared to $505,511 in 2016 and $405,000 in 2012. The overall dollar volume in sales also increased at a steeper year-to-year incline last month — up 29.65 percent to just over $518 million — than it did between March 2015 and March 2016.

“I kind of sound like a broken record, but we continue to be in a very strong seller’s market in general,” Keene Taylor Jr., principal broker and sales manager at the Taylor Agostino Group of Compass Realty, told The Current.

The city saw 1,258 new listings last month, three fewer than in March 2016. The number of active listings in the city also decreased by a negligible amount, from 1,268 in 2016 to 1,266 this March. However, that’s well below the numbers from five years ago, when more than 1,700 active listings were on the market.

Unusually low interest rates and the increasing desirability of living in the city proper continue to drive sales. During the first weekend in January — typically a slow time for real estate transactions — one house in Burleith sold above list price for $900,000 with five offers, according to Lenore Rubino of Coldwell Banker Residential Brokerage.

Nora Burke of McEnearney Associates said she recently fielded eight offers, several of which were all-cash, for a house in the Palisades. “It’s definitely, across the board, busier than it was a year ago,” she said.

In some cases, rabid interest can inflate a sale price beyond its worth, according to Taylor. He recently sold a house on Broad Branch Road NW in Chevy Chase for $1.45 million — bidding started at $1.295 million, and he believes its actual value shouldn’t have exceeded $1.35 million.

“You could sell that house on the wrong week, without the motivated, capable buyers on the market, and have it sell for just over the list,” Taylor said. “It takes a certain confluence of specific circumstances for a house to get bid up. There’s a big element of luck in the process.”

While Realtors said they expect activity to remain energetic in the next year, many are looking anxiously at the possibility of cuts to the federal workforce and other economy-shifting proposals from the new presidential administration. Employees at federal agencies frequently buy homes in Northwest; large-scale changes could make the region less desirable. Rubino has been urging some clients to sell now rather than wait until next year.

“I like to joke now that I want to carry around a crystal ball with me,” Rubino said. “I’m reading the news like everyone else and wondering what’s going to happen.”

On the other hand, rumors of an exodus in the immediate wake of the election results didn’t prove true. Burke said she’d heard some rumblings in November that potential buyers were putting their searches on hold, but now they’re back on course.

Given that budget cuts affecting federal employees would lead to local contractors taking over some of their work, Taylor said he’s even less concerned about a possible Trump effect than he was when more severe reductions appeared likely.

“I have a high degree of confidence in the inertia of the bureaucracy to protect itself,” Taylor said. “No matter how bad they want to cut the government, I don’t think it’s going to be that effective in reducing things.”

Neighborhoods close to downtown, including Shaw and Brookland, have been especially attractive so far this year, according to Joseph Himali, an associate broker with TTR Sotheby’s International Realty. Demand is high in Dupont Circle and Burleith, but both have such low inventory that buyers now have to wait months for even one home to open up, according to Burke.

Areas such as Cleveland Park and Woodley Park have been “fine, but not crazy hot,” Himali said. But east of Rock Creek Park, Brightwood is on the rise, according to Clarence Pineda of Coldwell Banker’s Dupont/Logan Circle office, and the area could grow even stronger as the Parks at Walter Reed mixed-use complex will add more than 2,100 residential units and new amenities.

According to Himali, the strongest sales have involved homes without major needed repairs, as buyers prefer to enter their new homes without having to undertake extensive renovations. Rubino added that proximity to public transportation continues to be a major factor, as buyers as old as the baby-boom generation ditch cars.
Pineda recommends buyers seek loan pre-approval before launching their search. He’s been surprised to meet prospective buyers at open houses who haven’t taken that critical step.

“D.C.’s very competitive,” Pineda said. “A seller would not even consider your offer a serious offer without a pre-approval.”

He also wants buyers — many of whom now take to the Internet before consulting a Realtor — to observe websites like Zillow and Trulia with a grain of salt. Home-value estimates on those sites often fail to include the property’s current condition, he said.

Low interest rates appear to be on the horizon for the foreseeable future. Himali thinks they can be alluring to a fault, though. Buyers often appear willing to purchase homes that don’t fully suit their needs and desires simply because they’re eager to buy when interest rates are below 5 percent.

“You don’t want to spend $1 million to get a low interest rate. You want to spend $1 million because you want it,” Himali said. “Some people spend more time looking for a sweater than they look for a home. I try to really encourage my buyers to be patient. Wait until the place really sings to you.”