LATEST NUMBERS

CONDOS & CO-OPS

Median Sold Price for Condos & Co-Ops in Washington DC for contracts closing during the month of December was $499,450. That’s down 8.6% from the month of November, but only -1.2% from November of 2021, when it was $505,500.

Average Days On Market (DOM) for units sold in Dec. was 48 days, 22% higher than the 5-year Dec. average of 39 days. There was a 17.5% MoM decrease in new contract activity as buyers reeled from the Fed’s continued interest rate hikes.

December also saw an 18.2% MoM decrease in All Pendings (new contracts + contracts carried over from November) to 239; and a 22% decrease in supply to 842 active units.

This activity resulted in a Contract Ratio of 0.28 pendings per active listing, up from 0.27 in November and a decrease from 0.48 in December 2021. The Contract Ratio is 45% lower than the 5-year December average of 0.51.

ATTACHED HOMES

Attached homes took a solid YoY hit in December. The median sold price for Attached properties in Washington DC for December was $592,500. This was an increase of 1.3% from November, but a significant 9.1% decrease from Dec 2021.

The average DOM for units sold in December was 41 days, 19% higher than the 5-year December average of 34 days.

There was a 15% MoM decrease in new contract activity with 352 New Pendings; a 12.6% MoM decrease in All Pendings (new contracts + contracts carried over from November) to 487; and a 23.9% decrease in supply to 1,302 active units.

This activity resulted in a Contract Ratio of 0.37 pendings per active listing, up from 0.33 in November and down from 0.58 in December 2021. The Contract Ratio is 41% lower than the 5-year December average of 0.62.

DETACHED HOMES

In Washington, DC, the median sold price for Detached properties was $931,250., a whopping 30.2% drop from November (October contracts), but still up 3.1% from Dec. 2021, when the MSP was $903,500.

Average DOM for detached homes in December was 40 days, 27% higher than the 5-year December average of 31 days. There was a 19.4% MoM decrease in new contract activity with 50 New Pendings; an 11.1% MoM decrease in All Pendings (new contracts + contracts carried over from November) to 80; and a 12.8% decrease in supply to 212 active units.

This activity resulted in a Contract Ratio of 0.38 pendings per active listing, up from 0.37 in November and a decrease from 0.94 in December 2021. The Contract Ratio is 47% lower than the 5-year December average of 0.72.

A higher Contract Ratio signifies a relative increase in contract activity compared to supply, and indicates the market is moving in the seller's favor.

A lower Contract Ratio signifies a relative decrease in contract activity compared to supply, and indicates the market is moving in the buyer's favor.

Quotes, Stats & News

Fed Chair Jerome Powell_____________ "We’ve always said it was going to be difficult, but to the extent rates have to go higher and stay higher for longer it becomes harder to see the path. It’s narrowed. I would say the path has narrowed over the course of the last year.”

Greg McBride CFA Bankrate_____________ "The Fed raised interest rates for a seventh consecutive time and they’re not done, with more rate hikes to come in 2023. The pace of rate hikes might be slowing, but we still don’t know just how high the Fed will raise rates and how long they will stay there.”

Hamilton Project Director Wendy Edelberg_____________ "If you look at spending on goods relative to trend, it’s been 10% higher than trend, 15% higher than trends, these are just nutty numbers, but those numbers are now moderating. Even as goods prices have started to come down, service price inflation remained high. Because of what we know is happening with rents, it looks like on the horizon lower services inflation is in store.”

cnbc.com_____________ Investment research firm Morningstar predicts [non-housing] prices will fall precipitously by next year. Morningstar looks to the Personal Consumption Expenditures Price Index, also known as the PCE Price Index, which is the Fed’s preferred measure of inflation. You may have otherwise heard of the Consumer Price Index (CPI) to gauge inflation, but PCE captures a wider scope and better reflects the change in consumers’ spending habits when accounting for rising prices.The Fed uses the PCE Price Index when it refers to its target inflation rate of 2%, says Preston Caldwell, head of U.S. economics for Morningstar.Caldwell estimates that the inflation rate will average around 1.5% between 2023 and 2025.

Jonathan Pingle, Chief U.S. Economist, UBS_____________ "By the middle of next year, around the second quarter, the impact of higher rates, on top of low savings rates and too elevated consumption, will start to bite and we expect to see an outright contraction in the latter three quarters of next year. In the first half of the year, inflation should continue to move lower.But between now and then, the Fed will continue to raise interest rates, taking the federal-funds rate target to roughly the 4.75%-5% range from its current target of 3.75%-4%. At that higher level, we think that is restrictive. Once the economy shows visible signs of recession, the Fed will start to shift gears. If we do start to get outright job losses, the Fed won’t just sit on their hands." 

usinflationcalculator.com_____________ US Inflation Rate is at 7.11%, compared to 7.75% last month and 6.81% last year. This is higher than the long term average of 3.27%. The next inflation update is scheduled for release on Jan. 12, 2023, at 8:30 a.m. ET. It will offer the rate of inflation over the 12 months ended December 2022.

ycharts.com_____________On December 17 2022 The 10 Year Treasury Rate was 3.48%, compared to 3.44% the previous market day and 1.44% last year. This is lower than the long term average of 4.26%.

Greg McBride, CFA, Bankrate_____________ “Mortgage rates have fallen one-half percentage point from the October highs above 7% in expectation of a sharp economic slowdown in 2023 and moderating price pressures. Mortgage rates don’t follow Fed action, but instead move based on longer-term rates that have also fallen from the highs in recent months.”*While the federal funds rate doesn’t directly impact mortgage rates, which depend largely on the 10-year Treasury yield, they’re often moving the same way for similar reasons. With the 10-year Treasury yield falling from its highest levels in recent months, as the market prices in the potential for a recession, mortgage rates have fallen alongside them.

Erik Weisman, Chief Economist, MFS Investment Management_____________Economists were hoping that at the very least, the November jobs report would confirm recent data showing a slowing of upward pressure on wages.It didn’t. In fact, revisions to the previous month’s data erased what had been a softening of wage pressures.Weisman told Morningstar:"Powell has backed himself into a bit of a corner.” That’s because “if the labor market is strong, core services ex-housing inflation is going to remain very sticky.” This category alone could make the difference between inflation merely heading lower next year and getting down to the 2% inflation target the Fed is trying to reach." 

Goldman Sachs Research Analyst_____________ "There is a plausible path to a soft landing, though calibrating policy just right to stay on that path would surely be challenging. The initial steps along this path have been successful, but there is much further to go in 2023. Growth slowed quickly to a solidly below-potential pace this year, labor market rebalancing has gone very well so far, and recent months have finally brought signs of moderation in wage growth and inflation. We expect another year of below-potential growth and further labor market rebalancing in 2023 to solve much but not all of the underlying inflation problem. Unlike consensus, we do not expect a recession." 

Guideposts


A strong thread through the national housing market discussion has been uncertainty. No one can say for sure what will happen in 2023, but we can look to our local guideposts. The 2022 DC housing market outperformed expectations despite lingering Covid activity, inflation ballooning, and soaring mortgage interest rates. In 2023, many of the same drivers of that success, such as pent-up demand vs low inventory, and the rebounding popularity of urban strongholds like DC, are predicted to foster continued, moderate growth.

More Than An Investment


Homes are the nexus of our lives; tied to family, employment, education, healthcare, social sphere, and more. Whatever else it might be, for most of us, a DC real estate transaction is personal. Sometimes, regardless of the economy, moving becomes a necessity. Some find unique opportunity in unusual circumstances. Others may need to put plans on hold. What does the 2023 real estate market hold for you? You tell us. And we'll help you make it happen.

Experienced Guidance


One of the benefits our decades of experience in various real estate industry sectors affords is the ability to identify market conditions early, and employ proven strategies in response. We’ve seen markets rise, fall, expand and contract and developed strategies for all of them. The guide you want is the one who’s been down the path before.

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Real Estate Is Local


Like snowflakes and people, no two markets are alike. When reviewing market news and stats, be sure to differentiate District of Columbia data from that of the DCMA and Northern Atlantic region.

DCMA data & trends, in particular, can be misleading because, although news outlets and market reports tend to lump them together, each location within this area is quite different.

So view the national and regional data as general market information, and rely on hyper-local data for your personal needs.

MARKET DATA

*Updates monthly on the 12th for latest data