Heading into the fourth quarter of 2018, the real estate market in metro Washington, DC remains strong – but not quite as strong as this time last year.
We looked at absorption rates – again, the pace at which the market is “absorbing” available inventory – in September and compared that to last September. Just as last year, much the metro area has overall rates north of 30%, reflective of a sellers’ market. The District still has the healthiest market, followed closely by the close-in suburbs. Yet pretty much across the board, absorption rates have slipped 2% – 4% compared to last year. That’s hardly a seismic shift, but it is another indication that the market is starting to shift, to slow down.
The inventory of available homes is a little higher in DC and in Prince George’s County, and contract activity is off about 5%. In the other suburban markets, inventory is still lower than last year, but contract activity is lower as well. With rising interest rates, we expect this to continue the rest of this year. We simply think we’re seeing the beginning of a market that will see a bit more supply, a bit less demand and more moderate levels of price appreciation.
For reference, below you’ll find how we segment the market based on absorption rates. And if you want to know more about up-to-date market conditions in your neighborhood, we hope you’ll give us a call.