Market Trends

Agent Insight: Fall Market in the DMV, 2023

September kicks off the fall market in the DC area. Here’s why the scary interest-rate headlines of 2023 missed the bigger picture for buyers and sellers.

Originally published September 15, 2023. For the latest numbers, read More Homes, More Room to Negotiate: The DMV Housing Market This Fall.

By Daniel Luke Jones

Picture it: September in the DMV. The kids are back at school and a few weeks into their new routine. You’re still rocking your tan from that 10-day vacation in August. The heat and humidity don’t seem quite as unbearable as they did a few months ago. And then the For Sale signs start popping up.

September marks the start of the fall market in our area, and we should expect inventory to increase as more sellers and buyers enter the market.

“But what about interest rates?”

National real estate headlines over the past few years have run the gamut from “Money Is Free!” to “Interest Rate Hikes AGAIN!” But what does that actually mean for you?

The market has certainly performed outside of expectations lately. But who could have predicted a global pandemic? The COVID years skew the data, and we are only now approaching a normal market again. Those scary headlines saying the housing market is going to crash because of higher rates are there to sell papers and clicks. We can’t compare the COVID years to where we are now; the context was completely different. It is more useful to look at mortgage rates over the last 20 to 40 years, through all the ups and downs of the economy.

Looking at historical rates helps put today’s real estate and mortgage markets in context. And especially in the transient DC metro area, there are always people who need to sell and people who need to buy.

Wardman Insight

When rates fall, buyers flood back in and prices tend to rise with them.

Buying at today’s price and refinancing later can beat waiting for a lower rate.

For buyers: waiting has a cost

If you are waiting for interest rates to come down, here is what we typically see: as rates decrease, home prices increase, because more buyers come back into the market. You could wait to buy your dream home until rates drop, but by then you will likely pay more for that same home. You would end up about where you would have been buying at a higher rate and a lower price, except that buying now lets you refinance once rates do come down.

For sellers: don’t let rates hold you back

If you are a seller, don’t let interest rates stop you from moving up to that dream home, or right-sizing so you can put your equity toward the things you care about. There is still an extremely low supply of homes for sale, about a three-month supply, meaning that if no new homes came on the market, there would be none left for sale within three months. And there are plenty of motivated buyers still actively searching and craving more options.

Let’s talk strategy

Whether you are thinking about buying, selling, exploring an investment, or just want to understand the current market, reach out to Wardman Residential at Compass. We will happily set up a time to talk through your real estate and financial goals, and help you make the best decision for your next move.

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