Zillow recently published its Market Heat Index, and the DC market is among the highest-scoring, officially classified as a “Strong Seller’s Market.” After this past week, I can unequivocally confirm. The first few weeks of the year lacked the kind of inventory and activity necessary to gauge just how strong the market was. Between bad weather, political turnover, and a shortage of quality listings, it definitely felt like the market might be softer this time around compared to last year. But over the last one to two weeks, we finally started seeing quality inventory hit the market—and with it, the level of competition we haven’t seen since 2021.
Let me be clear: it is a seller’s market.
This past week, we had clients making offers across a range of price points and locations:
- An $800K single-family home in Springfield
- A $1.2M row home in DC
- A $700K townhouse in Fairfax
- Inquiries about a $2.1M home in Arlington
In every single case, there were multiple offers—not just a handful, but many. And all sold significantly over asking price. One of our colleagues reported over 100 showings on a Fairfax listing, with another 100 people attending the open house. That property received 30 offers. Granted, it was probably underpriced, but still—that means there are 29 other well-qualified buyers still out there looking for a home.
What we’re seeing is that buyers are falling into two main categories:
- Growing Families Needing More Space – Many of our clients have simply outgrown their current homes. They’ve held on as long as they could, but now their kids are getting older, and they need more bedrooms or a better school district.
- The "Commute Life" Buyers – These are buyers who initially left the city for far out suburbs or out of state completely, but are now returning due to job relocations or changing needs. The rental market is terrible, so many of them don’t have good options other than buying.
The holidays and January were unusually slow compared to recent years, but I think we’re now seeing pent-up demand exploding all at once. It feels like we’ve had more activity this past week than in the last two months combined. I wish it weren’t this way—it’s tough for buyers—but this is the market reality, and we adjust, adapt, and continue to help our clients navigate it.
Mortgage Rates Finally Drop
On another note, interest rates have finally dipped below 7% for the first time in over 30 days. The average 30-year fixed mortgage rate today is 6.99%. A year ago today, it was 7.04%. While it’s a small drop, it’s still meaningful in a market that does not need any more fuel.
I’m not sure the market could get any hotter if rates go much lower, but if they do, buckle up.
