Washington, D.C. is a bustling city with a diverse culture, lots of history, exciting nightlife and plenty of jobs for young professionals and peak earners. There are 67 unique neighborhoods across the district’s four quadrants.
D.C. has an expensive housing market and an estimated population of 671,803 residents. However, like many parts of the country, home prices are starting to drop, but the median list price can still vary widely between communities.
Home Prices In Washington, D.C.
Prices differ significantly across the district, with northwestern Washington usually being the most expensive but also the safest. Realtor.com reports a median listing price of $650,000 and a slightly higher median sales price of $667,000.
| Neighborhood | Median List Price |
|---|---|
|
Georgetown
|
$2,500,000
|
|
Logan Circle
|
$899,000
|
|
Capitol Hill
|
$888,000
|
|
U-Street
|
$767,500
|
|
Petworth
|
$750,000
|
|
Columbia Heights
|
$722,500
|
|
Foggy Bottom-GWU-West End
|
$707,000
|
|
Eckington
|
$679,900
|
|
Sixteenth Street Heights
|
$660,000
|
|
Brookland
|
$650,000
|
|
Brightwood-Manor Park
|
$612,000
|
|
Dupont Circle
|
$592,000
|
|
Cathedral Heights
|
$559,000
|
|
Trinidad-Langston
|
$554,900
|
|
Southwest Waterfront
|
$529,000
|
|
Adams Morgan
|
$475,000
|
|
Anacostia
|
$464,900
|
|
Fort Dupont
|
$460,000
|
|
Marshall Heights
|
$455,000
|
|
Congress Heights
|
$405,000
|
|
Source: Realtor.com
|
Washington, D.C. Real Estate Trends
Washington D.C. home prices are steadily declining, which benefits homebuyers as the market rebalances due to higher mortgage rates and lower demand.
Median Sold Price
Year-to-date through May 2023, the median sold price in the district was $630,000, down 4.5% from $660,000 in the same period last year. Home prices fell to $659,900 in May, down 2.5% from April ($676,500) but were up 1.5% from a year ago.
Prices are coming down from their 2021 highs and are trending below their five-year monthly average. The Greater Capital Area Association of Realtors (GCAAR) reported a steady decrease in the median sold price since mid-2022, but that has somewhat rebounded in 2023 as inventory shortages keep home prices elevated.
Additionally, the average home sold for 98.7% below the original list price in May 2023. This is notably below May 2022’s average of 100.8%.
Homes in Washington, D.C. remain significantly more expensive than the national median sales price of $388,800, according to data from the National Association of Realtors.
More Active Listings
There are more homes on the market than in recent years as homes remain on the market for longer and there are fewer closed sales.
Below are several relevant statistics from GCAAR’s May 2023 market report:
| Total | Five-Year Month Average | |
|---|---|---|
|
Active Listings
|
$1,811
|
$1,638
|
|
New Listings
|
$1,028
|
$1,303
|
|
New Pending Sales
|
$805
|
$935
|
|
Closed Sales
|
$749
|
837 |
|
Average Days on Market (DOM)
|
$30
|
25 |
Long & Foster Real Estate estimates a current housing supply of 2.4 months from the May 2023 housing market statistics. A reading between four and six months suggests a balanced market for buyers and sellers.
The current housing inventory is a 20% year-over-year increase from two months in May 2022, which still suggests a seller’s market. For an additional perspective, the supply was tightest in March 2021 at 1.61 months.
Buying a House In Washington, D.C.
Despite a monthly price dip in May, potential homebuyers are experiencing price increases as continued low inventory puts upward pressure on pricing. For those who have been sitting on the sidelines during the post-pandemic housing boom, it may be a while before home prices come down enough to entice them off the fence—especially with current mortgage rates impacting affordability.
With less inventory available than usual, buyers still face competitive conditions where there may be little room for negotiation on price. You may need to be selective about which neighborhoods you consider due to pricing variations. The typical area listing sells from mid-$500,000 to mid-$800,000.
Mortgage rates also remain near multi-year highs, which makes it important to compare the best mortgage lenders to get the best rate, loan terms and monthly payment.
Selling a House In Washington, D.C.
Sellers won’t be able to earn as much as similar properties sold during the housing market peak in 2021 and the first half of 2022. Washington’s housing market in 2023 appears to be in transition, but sellers still seem to have the upper hand.
Though it may take longer to sell a home and price reductions are more likely, the available inventory is low. As such, prices may remain higher during the busy summer selling season.
Sellers who don’t need to sell right away might be reluctant to leave their homes if they got a mortgage or refinanced when rates were at or near historic lows in 2020 and 2021. Giving up a 2.5% or so rate on a 30-year fixed loan for a new home loan at today’s rates north of 7% could diminish their borrowing power for their next home purchase.
Will Washington, D.C.’s Housing Market Crash?
Real estate experts aren’t expecting a housing market crash as the housing inventory remains healthy despite lower prices and fewer transactions.
The district is one of the most expensive housing markets in the country. However, many residents have high-paying jobs and steady employment prospects. Like similar high-cost housing markets, buyers are waiting for more affordable home prices to offset higher interest rates and monthly payments. As such, sellers have been listing at a lower cost to match the buyer’s revised borrowing capacity.
However, prices are not expected to drop dramatically this year as the market already saw a notable correction in 2022. Additionally, the average monthly supply reading remains low, which helps sellers maintain pricing power.
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Tips for Getting a Mortgage In Washington, D.C.
These practices can help you qualify for a mortgage when buying a home in the district.
Get Multiple Mortgage Quotes
Working with an online mortgage lender can make it easy to compare rates and fees for your home search. You can explore conventional and government-backed mortgages, which have varying credit and down payment requirements.
Related: FHA Vs. Conventional Loans Vs. VA Loan
Consider FHA Loans
Satisfying the down payment requirements for a conventional loan to avoid private mortgage insurance (PMI) can be challenging due to the high home prices in Washington, D.C. Instead, consider an FHA loan which requires a minimum down payment of only 3.5%.
For 2023, the FHA loan limit for Washington, D.C. is $1,089,300 on single-family homes. This loan limit also applies to Freddie Mac and Fannie Mae conforming loans.
Related: Best Mortgage Lenders For FHA Loans
Explore First-Time Homebuyer Programs
Several lenders offer first-time homebuyer programs with reduced down payment requirements. These loans can also have relaxed borrower requirements for those who haven’t owned a home in the last three years.
First-time homebuyers in the district may also be eligible for the Home Purchase Assistance Program (HPAP). Income-qualified borrowers can receive up to $202,000 in gap financing and $4,000 in closing cost assistance.
