Glover Park homeowners have trekked a home value plateau for three years now, not finding the edge or the next steep incline, though the average row house price did rise 3.3% over 2023 to a new record of $1,346,820 in 2024! Prices rose 12% in 2022 to the prior record of $1,325,383, despite a doubling of mortgage rates that year. The primary driver has been a 50%+ drop in the number of home sales after 2021, drastically reducing supply, while demand held up. This nationwide phenomenon resulted from many homeowners locking in 3% (or less) mortgage rates in the post-Covid federal stimulus environment. Now, many people either love their mortgage too much to move, or they cannot afford to buy another house with mortgage rates now around 7%, prices remaining high and wage growth not keeping up with inflation.
The number of home sales ticked up slightly to 33 from 29 last year, but still is less than half the sales from 2021 and 22% below the average number of sales over the past 25 years. Houses mostly sold immediately, at the deadline set for reviewing offers soon after listing. The median days on market was 6, while the average was 12 days, which reflected a small number of overpriced properties that sat on the market a while. The average sale price was 102.4% of the list price, with 9 of the 33 houses selling below the asking price, which is an interesting stat reflecting the exuberance of some sellers and agents, tempered by the soberness of informed home buyers. The sale price range was quite wide – from $962K to $1.995 million for row houses. Square footage, extent and quality of renovation, number of levels, yard space and interior/corner position all can affect value greatly in Glover Park.
Suddenly, we now spot storm clouds at the edge of this plateau, and the direction of the turbulence is uncertain. During the financial collapse of 2007 the economy of federal government operations remained stronger than the general economy and Glover Park home prices did not decline, but remained flat for about four years (see chart), which was a best-case scenario. Now, with federal government employee buyouts, layoffs and federal department cuts, and the related effect on the rest of the local economy tied to federal government operations, the shoe might be on the other foot. While there will be individual stories of difficulty as a result of this, on the whole it is likely that real estate in Glover Park and within city limits will remain resilient. The “back to office” mandate will have a countering effect which might bring people back into the city, offsetting a drop in demand, and bolstering neighborhoods close to downtown. Whether this is a 1:1 tradeoff is unlikely and impossible to predict right now. In addition, DC has become a more diverse (and prosperous) economy over the decades and this might mitigate the risk of negative impacts to the real estate market.
The suburbs, especially the outer suburbs, are likely to see a greater negative effect. At the moment the market in region is not experiencing and noticeable negative effect. The chief economist for the National Association of Realtors stated that there is no evidence of rising inventory or plunging prices. Instead, we could experience just the opposite in the coming months. Uncertainty tends to cause buyers and sellers to pause, which could lead to even further seizing-up of the supply of homes which could cause property values to hold at these levels or even continue to rise. Likely this effect will be temporary though. In fact, we already have an ominous statistic in Glover Park – only one home sale has closed in 2025 so far, and it sold $238,000 over the asking price. At this rate we would see only seven home sales this year, and at the current average price level and interest rate, a 20% down purchase would have a monthly mortgage/tax/insurance cost of over $8,000.
The condominium market in Glover Park had somewhat different dynamics. The average price for a one bedroom condo dropped from $318,000 to $313,000 while the number of sales dropped from 29 to 23, which is less than half the number in 2022. This limited supply caused the average days on market to drop from five weeks to four weeks. Part of the reason for both the price and number of sales dropping is the slowing down of condo conversions of old apartment buildings. One: there just aren’t many buildings left to convert, and two: the developer frenzy has cooled with the doubling of interest rates, plateauing of prices and higher building and carrying costs. Average two bedroom condo prices plunged from $526,000 to $440,000 and the number of sales crashed from 21 in 2023 down to only 10 in 2024. But don’t fret all you 2BR Glover Park condo owners! This also was the builder effect – most of those sold were older re-sales rather than new conversion sales which go for higher prices. There was simply so little inventory of new units. It seems that to boost condo sales in Glover Park, the Mayor will need to remove the height restriction so that we can have skyscrapers in the neighborhood. Wouldn’t that be a sight to behold?
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