Dean Cottrill is president of the Coldwell Banker Residential Brokerage Mid-Atlantic region.
The Washington area’s residential real estate market was healthy and relatively stable in 2015. Sales and prices were up and demand was solid, though perhaps not as much as many agents expected.
Though we’re still fighting the low inventory levels that are driving this seller’s market, we saw a more normalized rate of price increases and a slight uptick in days on the market, both of which can help move the market into a more balanced position. Overall, things were nice and steady, and in real estate, steady is good.
There were several bright spots in the market worth mentioning. First, the metro area remains strong and in demand. After years of population declines, D.C. is growing again. Buyers really crave the walkability and convenience of living within the District, which keeps already-hot areas like Georgetown, DuPont and Logan Circle highly sought-after and is driving revitalization efforts in other spots like the Southwest Waterfront and Southeast Washington. It’s exciting to see new life in the region – including both new residents and new developments.
Looking at the larger metro area, we also saw surging interest in Reston and outer Fairfax County. The extension of the Silver Line and proximity to Dulles International Airport provides highly desirable accessibility, and builders there are meeting the demand for expansive square footage and minimal yard maintenance. It’s the right combination of what buyers want, where they want it. Prices rose 6.8 percent in Prince George’s County, good news for a jurisdiction that has experienced a high number of foreclosures and short sales.
Additionally, despite ongoing low inventory, investors were still able to find properties within the District in need of rehab to repair, renovate and put back on the market. Theirs is a welcome presence in the market, as today’s buyers are mostly uninterested in taking on any projects. They want finished, upgraded and move-in ready properties that they can start enjoying from day one.
On the other hand, we also noticed a few weak spots in the market. First, there seemed to be an overall lack of motivation among potential buyers. With mortgage interest rates holding steady all year, they just didn’t feel an urgent need to get off the fence and commit.
Sellers were likewise largely unmotivated, with lackluster wage growth and lingering concerns from the recession and sequestration making them hesitant to put their houses up for sale and move up to bigger or more expensive places.
There have been some recent changes that could influence both buyer and seller motivation as we move into 2016, though. In December, the Fed raised key interest rates for the first time in more than a decade. Typically when mortgage rates fluctuate, potential buyers and sellers are spurred into action, so it will be interesting to see if that happens in the months ahead.
Continued improvements to the economy, job market and consumer confidence are additional factors that might impel existing homeowners to list their properties. In fact, a December article by Realtor.com’s chief economist predicted that 2016 will be the best year in recent memory to sell. Low inventory is helping properties move quickly, while moderate price gains means it doesn’t necessarily make sense to hold off on selling with the hope of increasing profits.
Of course, no one can predict exactly what the future holds, especially in the ever-changing world of residential real estate. When I talk to local agents, though, about the year that was and the new one ahead of us, there’s a genuine sense of anticipation. They’re looking forward to 2016, whatever it brings.
Source : Washingtonpost.com