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Fueled by limited supply, home pricing in Metro DC hits new heights

•Strong population growth and modest regional economic gains, coupled with declining supply, have placed significant upward pressure on Metro DC home prices the past decade. Home prices hit their highest mark of the decade last month, with an average home price of $523,418, up 48% from the recession low, largely driven by shrinking supply, which dropped to 1.5 months last month. So what is happening across the region? 

•Washington, DC: In May 2018, the city had an average home price of $733,137, 65% higher than the recession low, driven by supply  decreasing from six months to two months and days on the market (DOM) down 61% in the past 10 years. Brentwood, which sits north of Eckington, led pricing increases with a 99% jump in the last 10 years driven by first-time homebuyers priced  out of the broader Logan / U Street area and shifting their focus east to more affordable markets. 

•Northern VA:  Prince William County experienced the greatest swing in pricing in Northern VA and the broader metro area since recession low, with pricing rebounding 91% as supply dropped from nine months to two months and DOM declined by 77% the past 10 years. In contrast, Arlington, where population growth has slowed due to population shifts both back into the city and outward toward Loudoun and Prince William over the past decade, increased 43.4% from the recession low, lagging all other regional jurisdictions.

•Suburban MD: Prince George’s County home prices have increased 78% since their recession low as supply has decreased from 17 months to two months the past 10 years. Driving that growth has been the condo market
where prices have more than doubled since the low points of the recession, with pricing increasing 16% since last year alone.

•Low levels of supply, coupled with a strong national economy and a regional economy which appears to finally be picking up steam, will drive continued price appreciation across the region, particularly in the high-growth outer suburbs and the eastern past of the city.

Source: JLL Research

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