There’s no longer a newsflash regarding the massive inventory shortage in the District of Columbia. “I feel like a broken record,” Tom Lewis, Redfin DC Agent explained, “but it’s the same story yet again!” In DC, inventory fell again over the last month. As we move into spring, we should see the inventory line head back up as we did at this time last year.
“Buyers don’t want to lose that ‘home of their dreams,’ so they are being very competitive with offers,” Tom said. They’re using strategies like waiving inspection and financing contingencies, offering all cash when they can, and letting the seller choose the settlement date. ”Just last week, after withdrawing an offer on a home that had received 13 offers, several of which were all-cash and with escalations up to $50K more than asking, my client decided to go for another property. We offered list price plus competitive terms and gave the seller 24 hours to respond. We did this so the property would be less likely to get multiple offers, and sure enough, our offer was accepted!”
For a complete picture of the local market’s most recent stats and trends, download the Redfin Market Report here: Redfin-Washington-Real-Estate-Market-Report-February-2012. Want to know how the Washington, DC real estate market is doing compared with the rest of the country? Take a look at the Redfin Heat Index:
*Redfin Heat Index MethodologyThe Redfin Heat Index (Beta) uses listings, sales, and price changes to determine the relative “heat” of a given real estate market. We set a baseline Heat Index of 75.0 at 6.0 months of supply and +5 % price change year-over-year.
Every percentage point increase in prices above the 5% baseline will increase the heat index by two points, every percentage point decrease in prices below the 5% baseline will decrease the heat index by two points.
Every one month of supply increase above the 6.0 baseline will decrease the heat index by seven points, every one month of supply decrease below the 6.0 baseline will increase the heat index by seven points.
Here’s the formula:
- MOS = Months of Supply: End of Month Inventory / Closed Sales in the Month
- $YOY = Year-over-year change in the median price per square foot.
- Heat Index = ((MOS – 6.0) * 7) + (($YOY – 5%) * 2) + 75