You’re likely seeing headlines about today’s housing market using terms like “cooling” or “slow”. These terms can be deceptive as it depends on what statistics are being used. Here is a rundown on where we are currently in the DC area.

Many Sellers Reluctant to Sell.

If you have been reading about the current market, chances are you have heard how the lower interest rates we had recently have locked current sellers into their homes. This is because many do not want to give up their current rate, which can often be below 3%, to take on a mortgage rate that has recently reached as high as 8%.

Multiple Offers Not as Common.

Because many sellers have been reluctant to sell, a good bit of the inventory we now see on the market is coming from sellers who had to sell, but may not have had time to properly prepare the home. The situation may have been a long-time owner who moved to a retirement home, or an unexpected job change where the home was not in prime condition before it went on the market. This has resulted in fewer homes receiving multiple offers. However, homes coming on the market in really good shape are still receiving multiple offers. Perhaps not the 5-7 we were seeing in the spring, but enough to drive up the price.

A Fast or Slow Market?

Because fewer homes are coming on the market and are often in less than desirable condition when they do, total home sales are indeed down. In this sense the market is slow, but not because of a lack of buyers. In fact, if you are a buyer looking to purchase one of the nicer homes that comes on the market, you better be prepared to act very quickly.

What Does the Future hold?

There is pent up buyer demand. Seeing a lack of inventory and the higher interest rates in the past 18 months, many buyers went to the sidelines. As interest rates drop, two things will happen. First, both buyers and sellers will return to the market. However, buyers are able to jump in immediately while it often takes sellers more time, as they must prepare their home for sale. This means initially we will probably have a glut of buyers that further drives up home prices. As more homes begin to come on the market, this could even out some. While the current market is fairly slow, expect next spring to be extremely busy with much competition among buyers.