In this market outlook, we review the most recent available data on the D.C. Metro area’s real estate market performance during Q3 2016.
We focus on the following metrics:

  • Sales
  • Inventory
  • Prices
  • Property Type Performance
  • Area Income & Employment

Unless otherwise cited, we refer to data compiled by Real Estate Business Intelligence.
We will present a summary of the key facts by analyzing this data, as well as provide a digest of what this data and the Q3 market conditions mean for you.
In the D.C. Metro area, total sales volume increased 16.1% from last August, and grew past $2.6 billion.
New contracts increased 4.1% year-over-year, to 4,907. This is the highest level of August pending sales since 2005. This August’s new contracts were higher than both the 5-year average (4,580) and the 10-year average (4,090).
Closed sales also hit new highs. They increased 12.7% since last August, reaching 5,089—their highest levels since 2006. August closed sales were 13.2% above the area’s 5-year average (4,495) and 20% above the 10-year average (4,242).
Not only are more properties selling, but they are also selling faster.
Median days-on-market for a property was 22 days this August, compared to 25 days last August. Properties sold even faster in July, which saw a median days-on-market of only 17 days. August’s overall numbers match the area’s 5-year average, but are much faster than the area’s 10-year average of 32 days.
Sales Summary: Demand for properties in the area is increasing fast. Properties are selling quicker, and in greater volume, than they did in Q3 2015, reaching decade-long peaks.
August was the fourth month in a row that saw a decline in year-over-year inventory levels.
Active listings dropped 16.4% since last August, to 10,305. August active listings sat just above their 5-year average (10,261) but landed significantly lower than the area’s 10-year August average (14,576).
New listings dropped 5.1% since last August, to 5,500. New listings also came in just above their 5-year average (5,364) and lower than their 10-year average (5,631). July saw an even steeper year-over-year drop in new listings of 8.6%.
Inventory Summary: Inventory is in decline. Active listings are dropping fast, while fewer new homes are entering the market to replace those sold properties.

Median home sales prices reached $420,750—only 1% lower than their all-time August high.
This August, they hit their highest August levels since 2007. They also increased 2.4% from August 2015. Prices were up 2.8% over their 5-year averages, and 8.0% over their 10-year averages.
This increase in median home sales price ran counter to national trends. During August, national median home sales price dropped 3.1% in August, and 5.3% in July.
Washington, D.C.’s rental market is also increasing in price and competitiveness. In September, rents in Washington, D.C. increased 3% month-over-month, and made Washington, D.C. the fourth most expensive rental market in the United States. At the same time, Trulia found D.C. to be the sixth most competitive rental market in the United States.
Price Summary: Housing prices—for both home buyers and renters—are increasing.
Property Type Performance
The data segments sales into three property types—Townhouses, Condos, and Single-Family Detached Units.
While townhouse price only increased .9% year-over-year, these properties experienced the greatest increase in demand, and the greatest reduction in supply. In August, new contracts for townhouses increased by 8.4%. Closed sales jumped 17.8%. Active listings decreased 21.7%. New listings decreased 8.9%. Of the three property types, townhouses also had the lowest median days-on-market: they sold in just 17 days.
Single-family detached units saw the greatest increase in year-over-year price: 5.8%. They saw a smaller increase in demand, and drop in inventory, compared to townhouses. New contracts increased 2.4%. Closed sales increased 10.8%. Existing listings decreased 15.6%. New listings decreased 5.1%. Single-family properties sold in a median of 23 days.
More condos sold than single-family properties. New contracts increased 2.9%. Closed sales increased 11.2%. But inventory of condos decreased the least among the three property types. Existing listings decreased 14%. New listings decreased 1.5%. Unlike townhouses and single-family properties, year-over-year condo prices actually decreased 3.4%.
Property Type Performance Summary: All property types saw an overall increase in demand and reduction in supply. However, townhouses were the hottest property type.   
Area Income & Employment
In September, the U.S. Census Bureau found the D.C. Metro area to have the highest median income in the United States. The District of Columbia, in particular, has experienced reliable increases in median household income year-over-year since 2008, when the rest of the region—and the country—saw these numbers decline.
The data also found D.C. has the lowest poverty rate (8.9%) of the country’s 25 most populous metro areas. August NBLS data also found that the D.C. Metro area has a significantly lower unemployment rate than the national average (August: 4.1% in D.C. vs 4.9% in the U.S.), a likely effect from the area’s recent job gain rate—which ranked fourth among the nation’s largest metro areas during the first half of this year.
Income and Employment Summary: The population of the D.C. Metro area is the highest paid in the country, and one of the most-employed among the country’s major metropolitan areas.
Q3 Market Outlook Summary: What This Data Means for You
The D.C. Metro area experienced an excellent Q3 this year.

  • Properties are selling faster, and in greater volume, than last year.
  • Inventory is lower than last year, and dropping fast.
  • Housing prices—for both homes and rentals—are increasing.
  • Wages and employment remain among the highest in the country, and continue to grow.

The D.C. metro area has traditionally provided an excellent market for real estate development and investment. In Q3, the market outdid itself and experienced gains in nearly all relevant metrics.
At Evergreen Private Finance, we work every day to help borrowers, brokers, and investors make the most of current market conditions. According to the market’s Q3 performance, now is an excellent time to invest in this market—for the first time, or to an increased degree.
Written by: Evergreen Private Finance