Home prices in the Washington area are being driven up by low inventory. With the number of homes for sale on the decline in the past eight months, buyers are competing over a sparse supply and pushing prices to new highs. That’s beneficial for homeowners whose equity is rising but less advantageous for anyone struggling to come up with a down payment.
Last month, the median price of a home sold in the D.C. area reached $410,100, according to data provided by ShowingTime RBI, based on information from MRIS, the region’s multiple-listing service. It was an all-time high for the month of December, surpassing the previous high of $408,000 set in 2014.
Falls Church was the most expensive jurisdiction in which to buy a home last month. Half the homes sold in the city went for $678,750 or more, up from $670,000 in December 2015.
Manassas Park was the most affordable place to buy a home in December. Its median price was $250,000, down from $324,925 in December 2015.
Prince George’s County had the most substantial annual price growth. Its median price jumped to $255,000 from $235,000 in 2015, an 8.5 percent annual increase. It was also the most affordable place to buy a home in the region.
The rest of the area had year-over-year price increases below 5 percent. Manassas city’s median price rose to $285,000 in 2016 from $272,000 in 2015. Charles County’s median price rose to $269,000 from $257,628. The District’s median price rose to $545,000 from $523,050.
Falls Church was one of the most expensive places to buy a home in this area. Half the homes sold went for $708,000 or more last year, up from $690,000 in 2015.
Home prices in the outer suburbs grew the strongest compared with those inside the Beltway. The median price in Frederick County, Md., rose to $279,000 last year from $268,500 in 2015. Prince William County’s median price rose to $335,000 from $324,000. Manassas Park’s median price rose to $275,000 from $265,000. Loudoun County’s median price rose to $445,000 from $432,000. Anne Arundel County’s median price rose to $315,000 from $307,000. Stafford County’s median price rose to $310,000 from $302,000. Montgomery County’s median price rose to $409,700 from $400,000.
The median prices in Fairfax County and Fairfax city were flat last year. Fairfax County’s median price inched up to $475,000 from $474,844. Fairfax city’s median price crept up to $482,000 from $477,500.
Sales slowed in December, only the second month in 2016 in which the number of homes sold in the month was smaller than the same month the previous year. The 4,023 sales were down 4.2 percent compared with December 2015.
Despite December’s slowdown, the total number of sales for 2016 was 53,504, a nearly 6 percent increase over 2015. Prince George’s County had the biggest jump in sales. Its 10,384 sales were almost 11 percent higher than in 2015.
The number of homes for sale continues to shrink, making it challenging for buyers to find something they not only like but also can afford. Active listings plummeted to 7,457 last month, down nearly 14 percent from December 2015. Inventories are below the five- and 10-year averages for the month. Montgomery County has seen the steepest drop in homes for sale. It had nearly 21 percent fewer homes for sale last month than in December 2015.
One reason inventory has declined is that fewer owners are putting their homes on the market. The 3,089 new listings that came on the market last month were 17 fewer than in December 2015.
A sign that inventory is tight is how quickly homes are being bought. Half the homes sold last month went under contract in 29 days or faster, five days quicker than in December 2015. Homes sold quickest in the District, which had a median days-on-market of 14. Homes lingered longest in Fairfax city, which had a median days-on-market of 56.