April marked the 17th consecutive month of year-over-year home-sales declines in the Washington region, as well as the second straight month (and third month in five) of falling median sales prices.
Yet with extremely limited inventory – there are just one-third the single-family homes on the market compared to pre-COVID – the local market seems in no danger of freefall, according to analysis of new data.
A total of 4,207 homes went to closing in April in the Washington region, according to figures reported May 10 by MarketStats by ShowingTime based on listing activity from Bright MLS.
That’s down 33 percent from a year before, a window in which the market had been in full frenzy as buyers attempted to find homes before the full impact of interest-rate hikes hampered their options.
Figures represent transactions in the District of Columbia; Arlington, Fairfax and Loudoun counties and the cities of Fairfax and Falls Church in Virginia; and Montgomery, Prince George’s and Frederick counties in Maryland. Sales were down in all component communities.
When it comes to month-over-month, home sales were up just 0.6 percent from March to April, an anemic springtime increase given historic norms.
“There were bigger gains among single-family homes, though the price of condo sales was down significantly from typical spring sales activity,” said Lisa Sturtevant, chief economist for Bright MLS.
After a spurt of activity starting in the summer of 2020, year-over-year sales figures slumped into negative territory starting in September 2021. For 19 of the ensuing 20 months – with a slight exception in November 2021 – year-over-year sales have been down ever since.
But year-over-year median sales prices had remained up until last December, when they dropped for the first time in years. There were increases to start 2023 but then declines resumed in March and April.
For April, the median sales price of $586,000 region-wide was down 1.5 percent from April 2022 figures.
“Single-family, attached townhomes and condos all had lower median sales prices in April 2023 than a year ago,” Sturtevant said.
The decline in median prices, however, was far from universal: Arlington, Fairfax, Montgomery and Prince George’s counties and the city of Alexandria saw increases, although in the latter two localities that may have had more to do having a larger percentage of pricier single-family homes in the overall mix.
Prospective buyers did come out in April, snatching up many of the limited number of properties on the market. As a result, the number of active listings – which had been rising (from a very low base) for six months – retreated in April.
While that decline has been most marked in the single-family sector, prospective sellers also are having trouble in the townhouse market, where inventory is down about 45 percent from pre-pandemic levels, and condo market, where it is down 25 percent.
Figures represent most, but not all, homes on the market. All April 2023 figures are preliminary and are subject to revision.
Price-Appreciation Streak Broken Across Mid-Atlantic: Year-over-year median home-sales prices had increased for 86 consecutive months across the Mid-Atlantic housing market. But a flat April brought that streak to a close.
“The Mid-Atlantic housing market has not warmed up like it would have during a more typical spring,” acknowledged Lisa Sturtevant, chief economist for Bright MLS, which manages multiple-listing services covering about 70 localities across the District of Columbia, Delaware, Maryland and portions of Virginia, West Virginia, Pennsylvania and New Jersey.
“The effect of the relatively high mortgage rates and uncertainty in the economy are definitely having an impact,” Sturtevant said.
At the same time, given the lack of inventory across the region, “homes are still selling very quickly, and there is a lot of competition for relatively few homes for sale,” Sturtevant said.
The median home-sale price across the Bright MLS region in April was $380,974, a slight decline from a year ago. Most of that decline was concentrated in the Washington metropolitan area; most other regions saw increases – and prices remain 30-percent higher than pre-pandemic levels.
A total of 17,341 sales closed during the month across the region, down 29 percent from a year before. Buyers are out and about, but the light inventory means they have less to choose from.
Pending sales rose 4.1 percent from March to April, significantly slower than the typical month-over-month jump as the market kicks into springtime.
The 22,365 pending sales in April reflect an overall “subdued” spring housing market but there was a higher increase (8%) in the sales of single-family homes. Townhouses and condominiums saw lower month-over-month sales.
The outlook for later in the year? “Many discretionary sellers have been sitting on the sidelines as many homeowners have locked in extremely low mortgage rates and they are not enticed to move and take on a higher rate,” Sturtevant noted. “As we head through the rest of the year, more homeowners will be looking to sell and inventory should improve somewhat. However, inventory will continue to be limited and the market will still favor sellers.”
Figures represent most, but not all, homes on the market. All April 2023 figures are preliminary and are subject to revision.
