Older, expensive to maintain DC condos may be turning away buyers. So might be crime
Home sales have slowed throughout the D.C. region, with August sales the lowest for an August in 16 years, according to listing service Bright MLS. But prices continue to rise.
Throughout the D.C. metro, the median selling price in August was up nearly 8% from a year ago, according to Redfin, with prices rising 0.5% from July to August, the largest monthly increase in four months.
Price gains vary throughout the region, and one notable change in July was that the median selling price in Montgomery County, Maryland, topped the median selling price in the District, $635,000 versus $630,000.
“What’s impressive about it is that is the first time I can ever remember that this median price in Montgomery County is higher than the median price in the District of Columbia,” said Corey Burr, at TTR Sotheby’s in Chevy Chase, who has more than 30 years experience in the D.C. area market.
He believes that is not so much a reflection of Montgomery County’s housing market, as it is a reflection of emerging signs of struggles in the D.C. housing market.
“In Montgomery County, for example, the average sold-to-original list price ratio is at 106%. In the District of Columbia, it is at 96.4%, and it is the one jurisdiction that is showing this weakness in a very strong way,” Burr said.
Homes that sold in D.C. had been on the market an average of 40 days, compared to just 17 days in Montgomery County.
Burr said the District’s vast inventory of condominiums may be among the factors weighing on the District. Citywide, the housing stock in D.C., excluding rentals, is nearly evenly split between single-family homes and condos and coops.
While thousands of new condominium units have been delivered in the District in the past decade, many D.C. condos are older buildings, including hundreds of beautiful, aging pre-war buildings, largely in Northwest D.C. With age, comes added cost.
“I think there is an inventory of older buildings in the District of Columbia that perhaps the high condominium and coop fees needed to maintain and improve these very old buildings is squeezing out the available money left to service a mortgage,” Burr said.
Crime may also be weighing on home sales in D.C. While crime is down in the District, an outsized number of high-profile carjackings and gun crimes is not something that buyers are willing to overlook.
“Unfortunately, I think it is also having a lot to do with public safety. People just don’t want to spend a lot of money in areas where they are not quite sure they are going to be safe,” Burr said.
In August, the median price of a home sale in the District remained among the highest in the region but was still 1.4% lower than a year earlier, according to GCAAR. Closed sales were down more than 15% from a year ago.