Since early 2020, home prices for Rockville real estate have experienced steady increases. That trend continued through 2022, with home prices increasing from January through September. Although data indicates that the market is experiencing a period of cooling, prices are expected to continue increasing through the next year.
October 2022 snapshot
- Homes for sale: 22, up 47% since January.
- Price per square foot: $319, up 3% since August 2022.
- Median list price: $915K, down from the peak of $959K in September 2022.
- Average days on the market: 35, 2.7 times longer than 13 days in July 2022.
- Homes for sale: 10, up 4x since April 2022.
- Price per square foot: $331, up 11% since January 2022.
- Median list price: $533K, up 3% since September 2022.
- Average days on the market: 19, 1.7 times shorter than 34 days in January 2022.
- Homes for sale: 17, up more than 5X since January.
- Price per square foot: $345, up 4.2% since August 2022.
- Median list price: $835K, down from the peak of $1.71M in April 2022.
- Average days on the market: 30, an increase of 30% since January 2022.
- Homes for sale: 23, up more than 3X since March 2022.
- Price per square foot: $274, up 18% since April 2022.
- Median list price: $617K, down from the peak of $634K in September 2022.
- Average days on the market: 19, 2.2 times shorter than 41 days in January 2022.
The above data references are intended to be a general snapshot of October 2022 Rockville housing market conditions for a small sampling of area zip codes. Those not included in the above data are 20847, 20848, 20849, 20854, 20857, and 20877.
Overall, during 2022 the Rockville market has seen month-to-month variability. As a whole, the entire Rockville metropolitan area has experienced an increase in inventory, price per square foot, median list price, and days on the market during Q2 and Q3 of 2022.
2023 Forecast
Looking ahead to the real estate market forecast for 2023, economists and investors indicate that prices are expected to continue an upward trend; however, those increases will happen at a much slower rate than they have since 2020. With the cooling market and current economic outlook, the area is not favorable for short-term investment (less than one year) but is favorable for long-term investment.
Inventory forecast
Housing inventory in Rockville has experienced many ups and downs since 2019, and data for 2022 show a consistent trend compared to the past two years. Even so, compared to pre-pandemic levels, housing inventory is low. The number of active home sales is expected to experience a typical seasonal decline over the winter months and an increase in the spring of 2023. Whether inventory numbers begin to trend upward to pre-pandemic levels depends on many factors, including the economy, interest rates, inflation, and the supply chain.
Demand forecast
Since 2020, the demand for homes has continued to exceed the available supply, triggering historic bidding wars and price increases. During 2022, the extremely bullish real estate market began to normalize due to the financial and economic impacts of rising interest rates and inflation. The result has been a decrease in demand and a reduction in home price growth. This decrease in demand is expected to continue through 2023.
Pricing forecast
With its proximity to Washington, DC, Rockville is somewhat insulated from some of the more appreciable market corrections seen elsewhere. Home values remain historically high, and prices are projected to continue their upward trend over the next several years. The good news for buyers is that with demand declining somewhat and inventory ticking upward, the market is more balanced, and bidding wars are less common.
Economic outlook
Real estate transactions across the nation are tied to the economy, so any significant financial bump in the road will be felt in the real estate market. For this reason, there is some concern for 2023. With interest rates and inflation continuing to increase, many buyers are either being priced out of the market or unwilling to give up their current low-interest-rate mortgages. These economic factors are the primary drivers of the trend toward decreased demand for homes. If interest rates and inflation continue to increase, the result could be a more pronounced correction in the real estate market.
Another potential economic concern is the increase in energy costs and the ongoing supply chain issues. The economic impacts of energy prices and supply availability may continue to drive up costs and delay new home starts. The overall effect on housing would be increasing new home prices, reduced new construction inventory, and further impact on consumer confidence.
While these economic indicators paint an uncertain picture for real estate markets across the U.S., no substantial corrections are anticipated in the Rockville area. Rockville is part of the broader DC metropolitan area and is a highly-skilled knowledge-based economy, which tends to be somewhat insulated from economic recessions. As noted previously, prices in Rockville are expected to continue increasing at a slower pace, and demand is expected to remain robust with only minor reductions.
Ready to buy or sell?
Real estate and economic forecasts are difficult to pinpoint, but based on current trends and insight from economists, it appears that the real estate market for Rockville will experience continued cooling through 2023 but will remain strong. The market will be good for long-term investment, as housing prices are expected to increase for several years.
If you need expert assistance buying or selling a home, the award-winning team at Argent Realty would be pleased to help. Our agents are Washington, DC, area real estate specialists with an impressive track record of success and satisfied clients. Contact Matt Escobar today for more information.
