Washington DC March 2021 Market
Washington DC March 2021 | Buyer interest rose for each type of home in February with the highest level of demand in the higher-priced single-family and condo segments. Except for lower-priced single-family homes, demand was as high, or higher, than one year earlier. While demand rose over the month, would-be buyers found their home search challenging. The months supply of single-family homes ranged from 0.8 to two months. The months supply of townhouses was just as challenging at one month. Only condos recorded a months supply greater than two.
How does this compare to last year?
Home demand rose for the second consecutive month in February. Even after the unusually high level of buyer demand in the second half of 2020, early indications are that buyer interest in Washington area homes will retrace the seasonal rise experienced last spring. Low mortgage rates, an improving economy, and the desire by some buyers to purchase a larger home have all contributed to the most recent rise in demand.
Where does this data come from?
The Home Demand Index captures buyer demand signals by looking at a unique combination of pre and post-sale information including:
- Showing requests
- Views within Bright MLS
- Accepted showings
- Home sales across the Bright footprint
Source: Home Demand Index
Reality of Writing Offers in this Market
Cash offers at list are bad offers right now! Yeah. We are seeing homes selling 10-20% over asking price. To be successful, buyer are waiving both the home inspection contingency and the appraisal contingency. This takes serious cash in hand.
What can you do to make sure you have this cash?
You can put less money toward your downpayment so you have cash to make up the difference between appraised price and contract price. (Make sure you talk to your lender about the financial ramifications of this.)
If you don’t have the ability to do this, there is not much point in even trying right now.
Why am I telling you this?
To set your expectations. I want to educate you on the current state of the market. There are a lot of people in the market right now who can waive inspections and appraisals because they have the means to handle issues that arise. You also have to be able to handle writing a lot of offers and not getting accepted. You need to be creative. Can you offer a higher earnest money deposit? Maybe $50,000 EMD and make it non-refundable? Can you offer a rent-back to the seller who also needs to be able to purchase or move?
There is still opportunity in the market.
You need to be willing to go where the other buyers are not. Condos in the city, houses that need work, houses that have been sitting. If you want to look at these houses, you have the ability to get a little more power back. If you want the houses that everyone else wants, get ready to compete, and get your cash ready to spend!