The long-running lack of homes for sale in DC will continue to be an issue in the spring market, but the coming months could be worse for home buyers than in recent years.
The inventory of homes in DC last month came in at a paltry five weeks, the lowest inventory for a month in the city on record. While the inventory is sure to rise as the spring market gets going, the city is nowhere near the 6-month benchmark that illustrates a balanced market.
As noted, the inventory shortage in the city has been a constant in the market for years. DC hasn’t had a three month supply of homes since back in July 2012. The inventory of active listings for sale has been below the six-month level since July 2009.
The reason for the lack of homes on the market has as much to do with buyer demand as it does with home owners deciding to stay put. Despite rising interest rates there has, on average, been more than one pending contract per active listing in the city this year. And as Neil Irwin recently pointed out in an article about the spring housing market in The New York Times, this dynamic is being felt around the country.
“As long as there are more families looking for a place to live than new homes in place to accommodate them, the pressure on prices and sales will be upward, no matter what happens as the market adjusts to higher mortgage rates and tax changes.”