by Brandon M. Scott
The real estate market in Washington DC has always been a topic of interest for investors, homeowners, and real estate enthusiasts. As we step into the latter part of 2023, it’s essential to look back and analyze the trends, especially when comparing them to the previous year. The last two or three years of real estate have been anything but comparable so perspective in critical anchoring force. Here’s a overview of the DC real estate market for August, focusing on the key points and notable trends and a look at the current mortgage rate environment.
Key Points & Notable Trends:
- Rising Stars: Some zip codes have seen a significant surge in their property values. For instance, the West End/Foggy Bottom area (20037) witnessed a whopping 62.4% increase in 2023 compared to 2022.
- Steady Performers: While some areas like Friendship/Chevy Chase (20015) and Georgetown/Burleith (20007) have seen substantial growth, others like Howard U./Shaw (20001) and 16th St Hts/Crestwood (20011) have experienced a slight decline.
- The Bigger Picture: Overall, the Washington DC area saw a minor decrease of 1.6% in August 2023 compared to August 2022. However, when looking at the year-to-date figures, there’s a decline of 5.3%.
- Shifts in Buyer Preferences: The data reflects shifts in buyer preferences, with some areas experiencing a decline in demand. For example, Zip Code 20012 (Colonial Vlg/Takoma) has seen a significant year-to-date decrease of 33.5% in median prices, indicating a potential shift away from this neighborhood.
Zip Code 20018 (Brentwood/Lincoln) and Zip Code 20005 (Logan Cir/Thomas Circle) also saw substantial year-to-date declines in median prices, suggesting changing buyer preferences.
Top 10 Zip Codes with the Highest Percent Change:
For 2022:
- 20037, West End/Foggy Btm, DC: 62.4%
- 20007, Georgetown/Burleith, DC: 46.9%
- 20016, Cathedral Hts/Au Pk, DC: 35%
- 20015, Friendship/Chvy Chs, DC: 21%
- 20024, Sw Waterfront, DC: 24.7%
- 20019, Marshall Hts/Deanwd, DC: 6.8%
- 20017, Brookland/Catholic U., DC: 2.8%
- 20001, Howard U./Shaw, DC: 0.8%
- 20011, 16th St Hts/Crestwood, DC: -2.2%
- 20002, Capitol Hill/North, DC: -4.4%
Mortgage Rate Predictions:
Mortgage rates play a crucial role in the real estate market. Since March 2022, the Federal Reserve has raised rates 11 times, the last in July after a June break. The crystal ball on the outcome of mortgage rates is still fuzzy, but CBS News has collected some expert forecasts. Most expert predictions still leave us at the mid- to end- of 2024 before seeing any relief from rates. The Federal Reserve wants to get inflation at or below 2%, and the pressure is on.
The battle between the Federal Reserve and inflation has continued to dampen activity for many would be home buyers. This round, the Feds declined to raise rates recently but hinted toward another rate increase before the end of the year. Jerome Powell, Federal Reserve Chair, acknowledged that the Federal Reserve’s stance on rates has impacted the housing market. The trajectory of mortgage rates, in 2023, has not unfolded as expected, read more at this Forbes article on mortgage rates.
While uncertainty around mortgage rates exists, what’s true is that there’s a grow demand for real estate. We’ve seen this before, and the result of a lower rate environment will entice buyers that have been waiting on the sidelines. The influx of buyers will inevitably spark a rise in values for homes given more competition. Savvy home buyers should consider their current options to purchase a home, if buying a home is a goal.
The DC real estate market in August has shown some interesting trends, with certain areas experiencing significant growth and others seeing a decline. Preparation and focus will take savvy buyers a long way towards becoming a homeowner. As always, it’s crucial for potential buyers and sellers to stay informed and make decisions based on comprehensive research and expert advice.
As we end September 2023, be sure to keep an eye out for the next real estate market summary.
Brandon Scott is a licensed real estate agent in Washington, DC, Maryland and Virginia. His license hangs with Keller Williams Capital Properties in DC. He’s been involved in the mortgage finance industry for the last 22 years in various fields. You can reach him by email at [email protected]. Subscribe to his YouTube Channel at RealTeaDMV