“The party is over,” according to Lisa Sturtevant, chief economist at Bright MLS.
While home sellers may be sad that the bidding wars are over, DC-area buyers are more likely to feel relieved. Sturtevant predicts that the number of sales and the pace of price appreciation will slow for the rest of this year and into early 2023. She says the housing market will look more like 2019, before the frantic housing market caused by the pandemic .
Overall, Sturtevant predicts home prices won’t drop even in the cooling market conditions. However, some localities have a greater risk of falling prices. Typically, these are neighborhoods where prices have risen faster than average over the past two years, where inventory is growing rapidly, and where household incomes are below the area average.
Additionally, the communities most at risk are those where second-home buyers have driven up prices during the pandemic and where remote workers have moved in and warmed up demand — in other words, rural and peri-urban areas. and vacation home markets.
Sellers begin to lower prices
Sellers have begun to recognize slower market conditions and may have realized they overestimated buyer demand earlier this spring, especially as higher mortgage rates have squeezed buyers’ housing budgets. .
About 24% of homes for sale in DC saw a price drop in June, according to data provided by Bright MLS. By neighborhood, price declines ranged from a low of 8% of listings at Park View to a high of 46% at Fort Dupont Park.
Other DC neighborhoods with the highest percentage of sale prices reduced include Marshall Heights (43%), Southwest Waterfront (42%), Carver Langston (39%) and Lily Ponds (39%).
Neighborhoods where sellers lowered prices in June include Adams Morgan (30%), Deanwood (29%), Dupont Circle (26%), Georgetown (23%), Petworth (20%), Mount Pleasant (20%) and Capitol Hill. (19 percent).