State of Union
You’re likely familiar with tales from Washington’s nutso Covid-era real-estate market: homes selling for six figures above list price, buyers waiving all contingencies, open-house lines stretching down the block. That changed when interest rates started rising last spring. Suddenly, buyers and sellers paused instead of diving headfirst into the market, leading to a decline in activity that especially slumped toward the end of 2022 amid recession fears. The area went from 79,282 home sales in 2021 to roughly 59,450 in 2022, and as of January, local properties were sitting on the market for a median of 30 days—the longest stretch since January 2019, according to Bright MLS.
This isn’t to say we’re in a bad market now, agents caution—just a more level one. That means sellers shouldn’t expect bidding wars, and buyers no longer need to resort to insane contortions to score a house. “We were in a time we probably will never see again in our lifetime,” says Compass agent Kate Bohlender about the Covid real-estate shakeup. “That was just bananas.”
Things haven’t turned firmly in favor of either buyers or sellers, according to agents: While buyers now have wiggle room to negotiate price or ask for a home inspection, well-priced houses in desirable areas are still getting multiple offers. And because area inventory is historically low, prices have remained strong. In fact, the median rose to about $554,400 in 2022 from $530,000 in 2021.
And, as we leave winter behind, things are picking up—not to Covid levels but to the typical, healthy pace of a spring market in DC. “We were definitely slow in January and December,” says Bohlender, “[but] it’s shaping up to look pretty good.”
So, what to expect in 2023? After a few long and topsy-turvy years, it might be time to meet the new normal.
Here are their nonnegotiables and where they compromised.
It has to do with—you guessed it—higher interest rates.
Signs point to increased demand.
Goodbye, white, gray, and beige everything.
Can the area best associated with boxy office buildings become cool?
The median sales price was $650,000 in 2019. In 2022 it was still $650,000.