Federal Shutdown Weakens DC Housing Market
As the Federal government shutdown enters its fourth week, housing market conditions are weakening in the greater D.C. region according to Bright MLS. During the week ending October 26, the number of new listings coming onto the market was significantly higher than the same time a year ago and new pending contract activity has slowed.
A total of 1,618 new listings came onto the market across the greater Washington D.C. region, a 17.2% increase over the same week a year ago. New listings were up year-over-year in nearly all of the region’s localities, with notable exceptions in Loudoun County, VA, and Charles County, MD, where the new listing count was down from last year. However, new listings were up at double-digit rates in Montgomery and Prince George’s counties in Maryland, as well as in Arlington and Fairfax counties, and the city of Alexandria in Virginia.
As supply jumps, demand is weakening in the D.C. region. Overall, during the week ending October 26, there was a total of 1,558 new pending contracts on homes across the region, which is down 3.3% compared to the same time a year ago. New pending contract activity also slipped 3.1% from the week prior.
The median price of a newly listed home in the greater Washington D.C. region was $575,000, which was 4.5% higher than last year at this time. The increase in list price most likely reflects an increase in the number of single-family homes and townhomes coming onto the market, which tend to have higher price points than condominiums. Bucking the broader regional trend, in Washington D.C. proper, the median list price fell by 4.1% year-over-year. It will be important to watch pricing data in the weeks ahead.
The outlook for the Washington D.C. housing market remains uncertain. As we enter the fourth week of the government shutdown, federal workers around the region are missing their first paycheck. Private-sector, federal government contractors have not received payments for services. Across the region, people affected by the shutdown are starting to have to make difficult choices. Some of those choices are going to be reflected in the housing market.
Typically, housing market activity slows in the fourth quarter. This year, however, we are likely to see more listings coming onto the market in the greater D.C. region, with more homeowners needing to make a move. Prices have been holding relatively firm so far, but with more inventory, expect prices to weaken. The longer the shutdown goes on, the bigger the potential impact on the region’s housing market.
