At the turn of the New Year, I wrote that the 2015 D.C. real estate market was going to be a milder year than 2014 with fewer gains across the board. Part of me was certainly correct — total number of sales at this point in the year is down 2.7 percent, clearly a contrast to the booming 2014 market. However, our median days on market have decreased in 2015 by 11 percent across the District for all home sales, and the price per square foot for the city is up just over 2 percent.
Let’s take a look back at a few indicators of a strong market and recap what we have seen in the D.C. marketplace this year:
First, let’s look at the average sales price of homes through the end of May (June’s data wasn’t quite ready at the time of this article). Year over year, the market is only up 1.3 percent this year, but when we focus down to some of the neighborhoods that are on the rise, we see a different story. For example, the average sales price for Congress Heights (20032) is up more than 52 percent this year compared to the same time in 2014. An outlier neighborhood to many for years, Congress Heights has become a developer’s paradise, and 2015 has shown that Southeast D.C. continues to rise. The same trend of double digit increasing average sales price year over year has been seen to this point in Brookland (14.6 percent), Brentwood (20 percent) SW Waterfront (21 percent) and Woodley Park (24 percent).
Next, the total number of sales is an indicator that can measure the health of a neighborhood and predict directions of supply. So far in 2015, total number of sold units is down 2.7 percent across the District. However, focusing in on particular zip codes, we again see Brentwood coming out on top (53.7 percent increase in total sold units year over year). Other neighborhoods with an increased number of closed sales compared to this time last year include The West End and Foggy Bottom (42 percent), Deanwood (28 percent) and Brookland (19 percent).
Finally, what about the median number of days on market? For many, this number represents how hot a neighborhood might be as properties are snatched in a matter of days in some locations. The neighborhoods with the fewest number of days on market in 2015 are Shaw, Capitol Hill, Logan Circle, and Dupont Circle. However, of these, the Shaw area’s days on market has been reduced by 33 percent from 2014 and Capitol Hill’s by 20 percent year over year. This is in contrast to the 14 percent increase in Logan Circle from the same time last year.
As we move into the second half of 2015 when the summer may cool the market as families take vacation and the heat of the summer slows the market, it will be interesting to see how the market changes from this first half of the year. With historically low interests rates during the winter and spring, it will be interesting to see how the market turns as rates are expected to rise slightly.
What is the point to all of this? Quite simply, the city continues to change. This year, we have seen the rise of neighborhoods like Brentwood and the continued success of places like Brookland. While the markets are still strong in the Northwest staples such as Dupont and Logan Circle, the trend of moving east will prevail the rest of the year.
Tim Savoy is a real estate agent with Coldwell Banker Residential Brokerage, Dupont Circle. Reach him at 202-400-0534 or firstname.lastname@example.org.