Following the series of mortgage rate hikes that began in March 2022, the frenzy of the D.C.-area housing market eased somewhat as buyers waited for lower rates, lower prices and increased inventory. But with interest rates rising again in 2023, many buyers and sellers are adjusting their expectations to a new status quo in which inventory remains tight, prices remain high and relief of any kind seems unlikely anytime soon.
“We’re experiencing a somewhat dysfunctional housing market at the moment," Avi Adler, president of the Greater Capital Area Association of Realtors, said in an August press release. “There are fewer buyers due to higher interest rates and even fewer sellers, who feel handcuffed to their existing home and low mortgage rate.”
Lisa Sturtevant, chief economist for Bright MLS, said falling prices elsewhere in the United States, notably parts of California and other Western states, fed false hopes of a more buyer-friendly local market in the offing. Almost everywhere in the region, listed residential properties are spending less time on the market than they did a year ago. In Loudoun County, Va., northwest of D.C., residential properties spent an average of five days on the market in July, down from eight a year before. Elsewhere in Virginia, listings in Fairfax County and Alexandria sold in an average of six days, down two days year-over-year. Arlington County, Va., and Prince George’s County, Md., both bordering D.C.
Rents in August increased just 0.3 percent year-over-year in D.C. and 1 percent in the surrounding suburbs, according to Chris Salviati, a housing economist with the rental research and data aggregator ApartmentList. In August, according to the Zillow real estate website, median rent for a one-bedroom apartment in Washington was $1,849, up $98 from the year before. In Manassas, Va., median rent increased $43, to $1,752, for a one-bedroom unit, while in Laurel, Md., it increased $96, to $1,617.