Chevy Chase DC, a largely residential neighborhood on the far northwest border of the city, is a microcosm of the larger regional housing market at the moment: very few homes for sale, a large pool of buyers and the high prices that illustrate that imbalance. Every agent that UrbanTurf spoke with about the market in the neighborhood used the same word when describing it: frenzied.
“People are trying to buy right now and they’re feeling desperate,” Julie Roberts of Long and Foster said. “They’re wondering, ‘Are we ever going to be able to get a house?’”
It isn’t just that there are multiple offer situations on virtually all single-family homes, which means that buyers need to tack a 10% premium on the listing prices that they see. It is also that a buyer has to be willing to waive all contingencies when submitting an offer, from the home inspection to the appraisal.
“Price is typically a driving factor for sales, but in this market, all buyers are conditioned to waive contingencies, which isn’t ideal for first-time homebuyers,” Pam Wye of Compass said. “In prior years, in multiple offer situations, there were one or two buyers in the situation who were prepared to waive all contingencies. Now, all buyers need to waive contingencies to have a shot at getting a home.”
Most of the homes for sale in Chevy Chase are single-family homes that have many of the needs and wants that buyers are looking for since the pandemic began: outdoor space, home offices, extra bedrooms, and more family space. There are more buyers in the market now because people are seeing the flaws in their current living situation, and want to find a place without those flaws as soon as possible.
Heather Davenport of Compass illustrated the competition in Chevy Chase through the sales price to original list price ratio in 2021.
“From [the beginning of 2021] through today, 41 houses have sold with a sold/list price ratio of 109.7% — during the same time period in 2020, 42 houses sold with a ratio of 101.6%.”
Realtor Keene Taylor thinks the market will wane, but only when buyers refuse to keep fueling the frenzy.
“Buyers will fatigue and decide they’re not cut out for this market, and sellers will overprice their homes,” he said. “While some will be absorbed, most won’t if it’s a balanced market, and inventory will build.”