The COVID-19 pandemic has caused the worst economic slowdown in America since the 2008 financial crisis.
As we all learned during that crisis, the property market and the broader economy are inextricably linked. A problem with one is certain to cause an issue with the other before too long.
With this in mind, many people are wondering about the health of the Washington, D.C. housing market, and whether this is a good time to buy or sell a house in the area.
Read on as we look at all the relevant factors and explain what you need to keep in mind in terms of the property market at this difficult time.
The Pre-COVID Situation in the Washington, D.C. Housing Market
Before the COVID-19 pandemic came to America, property was in the midst of a historic bull market run. Prices continued to rise on the back of the recovery from the last decade’s economic crash.
D.C.’s property market, usually strongest in the spring and summer months, had just set off on its seasonal incline when the pandemic descended in mid-March.
However, the impact of the pandemic in D.C. has been different to what you might expect. As you will see, the property market here has reacted differently than the markets elsewhere in the country.
The Market Effects of COVID-19
When economic activity stalls, property prices often fall. Many areas of the country have already started to notice this trend.
However, Washington D.C. is different than anywhere else in America, for a number of reasons.
Firstly, most federal government operations are based here. That means that the area has a lot of high-paying jobs, none of which have gone away due to the onset of COVID-19.
Another factor is the recent increase in tech activity in the D.C. area. In July of last year, for example, Amazon announced its intentions to build a second headquarters in nearby Arlington.
This has kept demand in the area steady, even as it has fallen elsewhere. Supply, however, has fallen.
Social distancing requirements and movement restrictions have made selling homes very difficult. For this reason, many sellers have left the market temporarily, while the ones that remain have found the sale process much slower.
These factors have combined to keep property prices steady. We may even see slight increases in some areas as the property market’s busy season develops.
The Practical Implications
As well as causing price volatility, COVID-19 has affected the housing market in ways that have nothing to do with money.
Everyone wants to be able to carry out a physical inspection of a property before they buy it. Under normal circumstances, prospective buyers would visit several houses before they decided to make a purchase.
Because of physical distancing guidelines, physical viewings of property are impossible in many cases. Even where buyers or agents are hosting viewings, movement restrictions mean that the capacity for open houses and visits is greatly reduced.
Virtual viewings have been able to address this issue to some extent. However, very few people are willing to purchase a new home without walking around it first.
This has slowed down activity in the market, increasing the length of time it takes to get from an initial expression of interest to a sale agreement. Many sellers have actually withdrawn from the market for this reason; as outlined above, this has contributed to price stability.
As we enter the summer months, we are beginning to see signs of a recovery in terms of the number of houses on the market. This should hopefully make the market more efficient going forward.
How to Sell a House Under Current Circumstances
As you probably already know, this is not an ideal time to be selling a house. While you might be able to get a better price for your property, the process of actually making the sale will be far more difficult.
Below are some of the key things to keep in mind if you have to sell during COVID-19.
Online Presence
Online listing has emerged as a savior for many property sellers during this crisis. You can share high-quality pictures and videos of your property, and even host virtual tours.
While this isn’t as good as allowing people to visit your home in person, it is an effective and safe alternative at this time.
Curb Appeal
If you want to sell a house, you need to generate interest from the curb. While online listing may attract some attention, you need to make a good impression in real life as well, and the capacity to impress buyers with the inside of your home is unfortunately limited at the moment.
Make sure the front of your house is clean at all times, and keep the front garden and lawn area properly tended.
Real Estate Agent
The difficult market conditions have made the role of real estate agent more important than ever. Because of the competition in the market, you’ll need a capable, trustworthy professional at your side to make sure you squeeze every drop of value out of your listing.
How to Buy a House Under Current Circumstances
If you’re a buyer, the pandemic has made an already difficult situation even worse. An expensive market has become even more competitive, costly, and undersupplied.
This means that you’ll need a carefully considered approach when buying property in Washington D.C. this year.
Know Your Market
Demand has gone in a number of different directions, depending on the type of property you’re trying to buy. There is currently a huge amount of interest in, for example, mid-market family homes.
Office space, on the other hand, is not in great demand at the moment.
Shop Around
The pandemic has meant different things to different people. While some sellers have withdrawn from the market, others need to sell their property now more than ever.
If you make a habit of scanning listings regularly, you could well come across a bargain one day. Being one of the first to make an offer could make a huge difference if the person selling the property is in a rush to close a deal.
Build From Scratch
New builds are becoming increasingly popular in the Washington D.C. area at the moment. This is primarily due to the lack of inventory on the market.
If you can’t find anything that suits your needs available for sale, this could be an option for you.
Buying and Selling in the Shadow of the Pandemic
This is a hugely difficult time for buyers and sellers of property across America and the world, and the Washington, D.C. housing market is no different. Price volatility and practical operational barriers appear to be on the horizon for many months to come.
However, that doesn’t mean that buying or selling homes is impossible. If you want to make a move in the property market at this time, you’ll just need to consider your strategy a little more carefully.
To find out how we can help you with this, contact us today.