The D.C.-area housing market could be headed for a busy spring after a slow start to the year.
That’s according to Corey Burr, senior vice president of TTR Sotheby’s International Realty. “We’re coming out of a very cold winter where a lot of the activity was muted in January and February,” Burr said in an interview with WTOP.
He said the region is likely to see “a lot of pent-up demand” from buyers and sellers who held off listing homes until warmer weather arrived.
Historically, the spring market — especially the next four months — is the most active period for home sales in the D.C. area, Burr said.
Mortgage rates dropping to the 6% range from around 7% last year could also boost activity, he added.
“With interest rates down … there’s going to be more buyer demand,” he said.
At the same time, buyers now have more choices than they did during the pandemic housing boom. Burr said there are roughly 20% more homes on the market compared to last year, and properties are staying listed longer.
“The days on the market is the highest in five years,” he said.
Still, Burr stopped short of calling the current environment a buyer’s market.
“I wouldn’t call it a buyer’s market, but I would say it’s a more neutral market,” he said. He added that homes often see strong competition during the first week or two after they are listed, but after that, buyers tend to feel they have more leverage.
Economic factors and the Fed
Broader economic issues — including energy prices and global conflicts — can influence the housing market by affecting consumer confidence, Burr said.
“Buying real estate is financial and psychological,” he said, adding that rising gas prices tied to geopolitical tensions can shake buyers’ confidence.
Still, he said, interest rates remain the most important financial factor for housing.
Burr credited the Federal Reserve’s efforts to slow inflation with helping bring mortgage rates down.
“The Fed accomplished what they wanted to do,” he said. “They slowed down the economy. They slowed down residential real estate.”
Looking ahead, Burr said he would like the Fed to revisit how housing costs are measured in the Consumer Price Index, arguing that the current method keeps reported inflation higher than it should be.
Sales showing signs of improvement
Recent national housing data also points to modest improvement.
According to the National Association of Realtors, existing home sales rose 1.7% in February, with single-family home sales increasing 2.5%. Condo and co-op sales fell more than 5%.
Burr said those numbers reflect buyers reacting to slightly lower borrowing costs and more stable home prices.
“Prices are more stagnant than they’ve been at any point in the last five years,” he said, adding that some buyers now see an opportunity that didn’t exist during the pandemic-era market surge.
For homeowners considering selling this spring, Burr said timing is critical.
“This is the time of year where they’re most likely to have success selling the property,” he said.
Buyers, meanwhile, should make sure their financing is ready before they start house hunting.
“Get your ducks in a row,” Burr said. “Line up your financing and go look at properties.”
WTOP’s Diane Morris contributed to this report.