The books are closed on 2015 real estate, so I thought I’d devote this month’s column to a review of what happened in District real estate by zip codes in comparison to 2014 data.
The good news is that Washington real estate is still hot: In 2015, median prices continued to increase, homes sold in less time, and for a greater percentage of original list price. In each of the % Change for the three categories, percentage comparisons to 2014 data are represented in green if the percentage exceeds the District’s median, in black if the percentage increase is positive but less than the District’s median, and red if the percentage is negative over the 2014 data. Now let’s drill down into each of the categories.
The median sold price of District homes has increased by 31% over the last 5 years—from $399,000 in 2011 to $523,050 in 2015. That’s an average increase of 6% a year. For the last two years, however, that increase has been slowing down somewhat, but is still respectable. In 2015 the big winner for increased median sold price was zip code 20032 (Congress Heights) at 26.1%, followed by zip codes 20008 (Woodley Park, Cleveland Park) and 20010 (Columbia Heights, Mount Pleasant) at approximately 13% increase each. Not surprisingly, Congress Heights was also the zip code with the largest increase in the ratio of sold price to original list price — a whopping 4.50 percent. In fact, homes sold in Congress Heights for more than list price (100.86%).
Neighborhoods where median sold prices actually declined are zip codes where the home prices are already established as among the most expensive in D.C.: Logan Circle, Cathedral Heights, Georgetown. It’s worth pointing out that, while the percentage decline there was far less (an average of -3.4%) than the huge percentage increase (26.1%) in Congress Heights, the dollar value is not insubstantial—a $25,000 decrease as opposed to a $45,000 increase.
In terms of median days on the market (DOM), a negative percentage is actually a positive result for sellers because it means that homes in those zip codes (and overall in D.C.) are selling in faster time than the previous year. Ten zip codes saw a decrease in days on the market, while seven saw an increase. Four zip codes were unchanged. Interestingly, there does not seem to be any correlation between median sold price and DOM: Some zip codes where the median price increased sold in less time; others sold in more time.
The ratio of sold price to original list price (OLP) is a good indicator of the strength of our real estate market, but can be discouraging to buyers looking for bargains. We are still in a seller’s market, and for the last five years, the ratio of sold price to OLP has either been climbing (starting at 94.1% in 2011), or hovering close to 99% (in the last 3 years). And for 2015, there were at least 3 zip codes (20001, 20010, and 20032) where sold prices were actually higher than list price.
Many first-time buyers are only too painfully aware of the need to submit contract offers with escalation clauses that may take them from $20,000 to $50,000 (or more) above list price in order to win the contract. But the good news for buyers is that we are still in the winter market, when seasonal prices are at their lowest and competition from other buyers is minimal. So while there are no bargain zip codes in D.C., there are still some individual bargains out there to buy from sellers who have to sell now. Happy hunting!
Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city D.C. Reach him at TedSmithSellsDC@rlathome.com and follow him on Facebook, Youtube or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood open houses, as well as monthly seminars geared toward first-time homebuyers. Sign up at meetup.com.