Housing Market Trends

November and December have been characterized by a decline in overall housing inventory in the DMV, to some degree typical of the season. Average prices continue to trend higher than 2023 levels. 

November closed sales edged ahead in November relative to November 2023. The Washington, D.C. metro had 7.7% more closed sales in November 2024 than November 2023. This shifted the year-to-date trend positive, up 0.5%.

Looking ahead, new pending sales had strong growth in November, increasing 13.8% year-over-year. Transactions have been supported through the year by additional new listings and a growth in supply. However, in November, new listings in the metro fell short of where they were in 2023, down 5.2%.

Market Outlook

December should yield slightly higher sales, increasing prices, and growth in inventory for the Washington, D.C. metro in 2024. More activity is anticipated for 2025 as mortgage rates ease. However, buyers will face gradually increasing prices in 2025.

The biggest factor in the real estate market continues to be low inventory. Price is a function of scarcity. The "silver tsunami" of babyboomers selling their homes has not arrived as many boomers choose to age in place. Zoning requirements and the cost of land make adding new houses diffcult. If mortgage rates move even lower and so trigger more buyers to enter the market, a resulting increase in demand could push prices up yet further.

 

 

Here's a great article:

Housing Market Predictions For 2025: When Will Home Prices Drop?

The sustained low number of new listings relative to demand is the primary reason home prices continue to rise, especially in the case of single family homes.

Where are prices going?  As long as supply remains low relative to demand, upward pressure on prices will continue.  The gridlock in inventory will likely continue until mortgage rates decline enough to incentivize US homeowners with <4% mortgages to put their properties on the market (many experts suggest 5.5% as the magic threshold).  However, a substantial reduction in mortgage rates will likely result in increased demand for still-limited housing inventory, adding additional upward pressure on prices.  The answer?  If you plan to hold a property for 5-10 years or more, buying real estate today is better than waiting until later.  If you want to sell your home, sellers have a lot of leverage in the current market.