NOVEMBER 2023 | HOLIDAY ISSUE
Happy Holidays Dear Friends,
One of the Peloton instructors who regularly abuses me, uses the term “done and dusted” when you complete a certain portion of an exercise routine. I kind of like that phrase. Well it seems hard to believe, but 2023 is pretty much done and dusted! And what a crazy year it has been; both professionally as well as personally. I’ll hit the professional stuff first and save the personal stuff for last. If you want to skip ahead right to the personal stuff, I won’t be offended. Despite interest rates hovering between 7-8%, home values continue to appreciate at the modest rate of 2.4% annually. Inventory remains low because many owners either purchased, or refinanced, in 2020 and 2021 when rates were between 2-4% and many are simply staying the course until the rate differential becomes more tolerable. Current rates clearly impact affordability, therefore, there are fewer potential buyers competing for the current supply of homes. This results in a more balanced market that offers a Buyer reasonable choice, but Sellers who offer property in market ready condition and priced appropriately, may continue to see multiple offers and last only days on the market. The average sales price in the DC Metropolitan area stands at $637,674, up 2.4% from November of 2022. The number of new listings coming on the market is down by 23.6% while the number of homes sold is down by 23.2%, year over year. This is another indication of a balanced market where homes sell in an average of 21 days for an average of 99.45% of their original list price. Despite the current rate environment, Buyers are still buying! There have been 56,461 purchase transactions settled in 2023 while 73,589 new listings came on the market; one buyer for every 1.3 homes offered for sale. Interest rates are the key variable in our current market and there are many potential Buyers and Sellers simply sitting on the sideline waiting for their opportunity to get in the game. As inflation is brought under control, its anticipated rates will soften bringing more Buyers, and some Sellers to the market. The increased demand is likely to outpace supply growth, accelerate appreciation and create market conditions that will be favorable to Sellers. I’d like to be clear; no one really saw this current market coming. No one expected the Fed to raise interest rates the way they did, and no one knows with any degree of certainty what lies ahead. I’ll look to the facts and personally, I’m betting on real estate to continue as an incredibly solid investment. I have been an avid investor for the past 37 years; it has held me in good stead so I’m “all in” continuing on this track.