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How’s Our Market Performing? Our Q4 2018 Residential Market Update

In this market outlook we will review the most recent available performance data on the D.C. Metro area’s residential real estate market during Q4 of 2018.

We will focus on the following metrics:

  • Sales
  • Price
  • Inventory
  • Property Type Performance

Unless otherwise cited, we refer to data compiled by Real Estate Business Intelligence.

We will present a summary of the key facts by analyzing these data, as well as provide a digest of what these data mean for you.


Closed sales dropped 9.4% year-over-year in December. This was the fifth month in a row where closed sales declined year-over-year. December’s 3,521 closed sales were lower than both the five-year average (3,913) and 10-year average (3,665). Year to date, closed sales declined by 2.3% (to 54,403) across the entire D.C. Metro.

However, the D.C. Metro did see an increase in pending sales to close out 2018. In December, year-over-year pending sales increased by 1.4%, the first year-over-year increase in five months. December’s total pending sales (3,362) fell below the D.C. metro’s 5-year-average (3,377) but outperformed our 10-year average (3,183).

Sales Summary: The D.C. Metro’s sales numbers began their decline in September, and have mostly continued to slide, and continue to mostly underperform our five and 10-year averages. However, this may not be a significant cause for alarm, as we will discuss momentarily.


Just like we saw in our Q3 2018 update, even though sales have begun to decline, prices continue to increase. The D.C. Metro’s median sales price hit $445,000 in December, up by 5.9% year-over-year. This was the 27th month in a row that median sales prices have increased year-over-year in the D.C. metro. Median sales prices also continue to dramatically outperform the region’s five-year average ($415,630) and 10-year average ($381,101). Year-to-date, the D.C. Metro saw home median home prices increase by 3.5% last year.

D.C. itself saw a 6.0% year-over-year increase in median sales price, hitting $599,00. Overall, D.C. saw home prices increase by 3.6%, year-to-date, at the end of 2018.

Price Summary: Our region’s declines in sales appear to have no impact on our housing prices, which continue to rise year-over-year, and which continue to far exceed our five and 10-year averages.


Active listings increased in by October and November (by 2.7% and 2.1% respectively) but decreased by .5% in December. At the end of December, the D.C. Metro had 6,697 active listings, still significantly lower than our region’s five-year (7,560) and 10-year averages (8,830). D.C. in particular has seen a big jump in active listings, increasing by between 13.9% – 16.1% year-over-year in October, November, and December.

New listings in the D.C. Metro followed a similar trend; increasing in both October and November, and then decreasing slightly (by 3.2%) in December. Our region’s 2,710 new listings also remain below the region’s five and 10-year averages (2,920 and 2,917 respectively). D.C. itself only saw a slight .4% drop in year-over-year new listings at the end of 2018.

Inventory Summary: After two years of declining inventory, we are finally beginning to see levels increase, due to a combination of lowered sales, and substantial new developments finally coming online.

Property Type Performance

The data segments into three property types— Townhouses, Condos, and Single-Family Detached Units.

In December, new contracts decreased for Condos (by .2%) but increased for both Townhouses (by .9%) and Single-Family Detached Units (by 2.6%). Closed sales decreased for each property type— Condos dropped 3.1%, Townhouses dropped 8.7%, and Single-Family Detached Units dropped 13.5%.

However, median sales prices increased for each property type. Condos increased by 3.4%, Townhouses increased 9.7%, and Single-Family Detached Units increased by 4.5%.

Inventories increased for Single-Family Detached Units, while decreasing for both Condos and Townhouses. New listings of Single-Family Detached Units increased by 3.7%, and active listings increased by 8.4%. Active listings of Condos and Townhouses decreased by 15.0% and 5.5% respectively, while new listings decreased by 8.2% and 10.6%, respectively.

Property Type Performance Summary: It is clear where you will find the market’s increased inventory— in Single Family Detached Units, which was the only property type to see increases in both new and active listings. Townhouses appear to remain the most in-demand property type, as they saw the largest increase in median sales price, a slight increase in new contracts, and big drops in both active and new listings.

Q4 2018 Summary: What These Data Mean for You

As a whole, these data should not be too surprising, even if certain individual data points stand out. We have been writing for months that our market was slowing down in 2018. More inventory is finally coming online to fill the large volume of unfilled demand that has been driving our residential market for the last few red-hot years. At the same time, as sales have dropped for nearly half a year, it appears this demand may finally be slowing down.

However, it may be too early to identify the end of our hot real estate market, for a couple big reasons.

First, prices continue to increase. Median sales prices have increased for 27 consecutive months. While it’s possible this streak will break soon, that won’t be any cause for alarm. Median sales prices continue to remain much higher than our five and 10-year averages. In particular, as we just reported, we are seeing a lot of movement in our region’s luxury market.

Second, the elephant in the room— Amazon’s arrival. Beginning in 2019, Amazon will begin to invest billions of dollars in real estate development, and bring tens of thousands of new high-paid positions to our region. This 10-year long rollout is likely enough, on its own, to ensure our residential real estate market’s growth for the coming decade.

Our real estate market’s top opportunities may have shifted in the second half of 2018, but they are still abundant. Contact us today to discuss where they now lie, and where they may lie in the coming decade. Email us at, or call us at (202) 713-9072.