Washington DC Real Estate Market in 2014

Posted by Abbott Klar Real Estate on Wednesday, January 1st, 2014 at 8:44am

Washington DC Real Estate Market in 2014

Here are some predictions for the Washington DC Real Estate Market for 2014.
The DC area remains among the wealthiest
http://www.washingtonpost.com/blogs/govbeat/wp/2013/12/12/the-d-c-suburbs-dominate-the-list-of-wealthiest-u-s-counties/
Loans are going to be harder to get.  New guidelines under The consumer Financial Protection Bureau's Qualified Mortgage will now require a maximum debt to equity ratio of 43% even with large downpayments.  Self employed persons will also continue to have a harder time getting a loan.  One way to avoid this is to work with a local bank or credit union that lends out portfolio money- meaning they keep the mortgage on their books and can therefor set their own rules.  Some of the better rates out there are from local banks and especially credit unions.
Interest rates
(will remain very low but) will begin to rise. Right now interest rates on a 30 year loan (with great credit scores and 20% down payment) are hovering around 4.4% - 4.5%, expect that by the end of 2014 this will be closer to 5%-5.5%.  Not a big increase but enough to cost you a couple hundred dollars more a month on an average DC area home.

Parking
is going to continue to get tougher.  With the massive growth of development, increase in the number of residents, the ‘war on parking’ and the new rules that allow developers to build without new parking spots for residents expect parking to get more difficult and expensive.  This is not all bad, as we have a very robust and good Metro system and more residents are opting to go car-free.  But if you have/need a car, it’s going to cost you more.

Real estate prices are going up
but at a slower pace.  This market is a healthy one, as we don’t want to see meteoric increase in prices; rather a steady and continuing increase in prices in much more healthy for the market.  As prices have increased more sellers will considered selling their homes in 2014 as they are above water or are getting closer to their target price. Sellers who have been on the sidelines for the last 5 years waiting to sell their house and move will start coming on the market.  This will lead to an increase in the inventory of homes for sale, which will keep any rapid price increases in check. 

Owner occupied homebuyers will have a better shot at homes as investors are squeezed out.  With fewer foreclosures/short sales available for quick flips, the easy money has been made.  Expect many of the smaller ‘developers’ to fade out; this will be a market where the profit margins will be seriously squeezed. This is good for homeowners.

Multiple bids to remain the norm: Sorry, but this is not going away, so get prepared and competitive. 2014 will remain a strong sellers market.

Buyers action plan:
Get pre approved.  The Washington DC real estate market will remain very competitive in 2014.   You need to be ready to act when you find your dream home.

Seller action plan:
Get your house show-ready now so you can be ready for the Spring market.  You will be competing for aggressive, knowledgeable buyers who have very high expectations for their home.  Your house has to be the best presented, the best staged, and riced in order to sell in this market.

Hire a local real estate expert.  This is the market where you will greatly benefit from the expertise of a professional, local expert to guide you through the process, to properly prepare, price and negotiate the best terms for you.   What is important is your net.  You will net more from the sale of your home by hiring a local expert. 

Happy New year!

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