
Get Smart With City Chic is a bi-weekly column giving you the real talk rundown on what’s happening with the D.C. real estate market. Sponsored and written by Lindsay Dreyer, the broker/owner of City Chic Real Estate.
Welcome to our first installment of Get Smart With City Chic! Today we’re going to tackle the question everyone’s asking: is the D.C. housing market going to crash?
Let me start by saying, I am skeptical of real estate agents who are always rainbows and sunshine about the housing market. Real estate isn’t a binary thing, there is never a “great time to buy” or a “great time to sell”. It all depends on your personal circumstances. So with that in mind, here’s my real take on a potential housing crash.
Recap of the 2008 Housing Crash
I’ll keep this brief, but this is important. The last housing crash was caused by subprime and predatory mortgage lending, along with home builders and developers building like crazy. So when the Great Recession hit, it was a perfect storm. People lost their jobs, which meant they weren’t buying homes and couldn’t pay their mortgages. And because prices crashed, they weren’t able to sell them. There were way too many homes on the market. Lots of supply, plus low demand, equals party’s over.
How is this different from 2008?
We have high demand and low supply — the complete opposite of the crash.
On the demand side, the largest demographic group in the US, the Millennials, are now in their 30s and in prime home buying age. They are buying their first homes and move-up homes, which is creating a crunch across the entire housing market.
On the supply side, home building hasn’t recovered from the crash. The graph below shows how many new single family units are being built, and it definitely isn’t enough to satisfy demand. Add to that the labor shortage, supply chain issues and inflation, and we’re dealing with a very unfavorable outlook on new housing supply.

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