If you’re following the headlines, you’re seeing phrases like “luxury market dip” and “uncertainty” getting thrown around. The problem is those takes are lazy. They’re comparing the first quarter of this year to an unusually strong first quarter last year, which was driven by a much milder winter and an early start to the market, while ignoring the fact that this year’s harsher winter simply delayed activity.
Almost exactly one year ago, the market shifted fast. What had been a competitive seller’s market right after the election and a surging stock and crypto market started moving the other way, and it didn’t take long.
The turning point came in early spring when tariff announcements hit the broader economy. Stocks dropped, interest rates jumped, and uncertainty spiked. Add in the noise around DOGE, and the housing market stalled. Buyers pulled back, sellers held onto peak expectations, and activity slowed for much of the year before gradually improving through the summer and fall.
A lot of the buyers who stepped out last year didn’t disappear. They waited and there is a direct correlation to the slow market last year and fast pace this year. You can see it in the showing activity, which is up 33% compared to last year.
Ironically, the same tariffs that helped freeze the market last year are now set to be refunded starting next week. That puts money back into the system and could add another layer of support for demand.
Last year’s mild winter and surge in markets pulled the market forward, however this year is playing out the way it usually does, with activity building around Spring Break and Easter.
As a result of a more concentrated market, activity is concentrated. Instead of 6 months to get buyers under contract, we have three, all the while with more buyers. The good news for buyers is that we have more inventory, upwards of 25% more in the DC metro market.
The continuing trend is that this is a split market. The best homes in the best locations are still moving quickly and getting multiple offers. Everything else is taking longer and seeing more price sensitivity. That’s what’s pulling the averages down.
That divide shows up clearly across local markets. Fairfax County remains the strongest by a wide margin, with even condos performing well compared to last year. Falls Church and Alexandria are also seeing solid demand and rising prices.
Loudoun County and Montgomery County are relatively flat, while Washington, DC and Prince George’s County are softer, with prices trending down and weaker overall demand.
Overall, the market remains challenging for buyers in high demand areas, while plenty of opportunity exists if you’re willing to be flexible on location, property type, or condition. The gap between those two realities is where most of today’s "deals" are being made.