3/18 Email

THE WEEK IN REVIEW

Welcome to my weekly newsletter featuring a personal note on the ever-evolving world of real estate along with a few news-worthy updates. Enjoy!

absorption rate

While the term may be unfamiliar, Absorption Rate answers a key question in real estate: "How is the market in this particular neighborhood?" Determining how quickly inventory is being sold, or absorbed, gives us an absorption rate calculated in months. That means the number of months it would take for everything currently on the market to be absorbed or sold.

You may have heard the phrase, "6 months worth of inventory is considered a ‘balanced market.’" By that, we mean there is no real advantage to the Seller or the Buyer based on current Supply and Demand. Understanding absorption rate and how a submarket is moving is CRITICAL to pricing and presenting a home to the market.

Not only does location affect how a particular submarket is moving, PRICE POINT, SIZE, PROPERTY CONDITION AND AMENITIES are critical components of the calculation.

For example, 20001 includes the neighborhoods of Logan Circle and Shaw. Right now the absorption rate for a 2 BR, 2 BA condo in 20001 is 22 months! There are 40 such properties on the market, and they are going under contract at the rate of just under 2 per month. With no new units coming on the market, and a constant pace of sales, it will take 22 months for all inventory to be sold. Buyers hold the cards.

Contrast that to a single family, 4 BR, 3+ bath home in Georgetown (20007). There are currently 8 such properties on the market. On average, 1.5 such properties are going under contract per month. Contracts are trending upward on a month over month basis. That gives us an absorption rate of 5.3 months and the edge goes to Sellers.

Listing of the week

spotlight on STONE HARBOR, NJ

274 106TH STREET

Listing Address

6 BD 4.5 BA 3,230 SF $5,895,000

real estate & the news

40% of new Ferrari buyers are under the age of 40 demonstrating how wealth creation is happening at a young age, not to mention the impact of wealth redistribution generationally. (CNBC)
The price of gold has soared over 14% since the start of 2025, which usually signals investor concerns about economic uncertainty, inflation, or geopolitical instability, as investors view gold as a safe-haven asset. (CNBC)
The Great Wealth Transfer that’s already underway will see women control around $34 trillion in investable assets by 2030. (McKinsey)
Prices for goods and services (inflation) moved up less than expected (2.8%) in February, providing some relief as consumers and businesses worry about the looming impact tariffs might have on inflation. (CNBC)

around dc

Art in bloom dc

Art in Bloom DC is a prestigious annual exhibition that celebrates works of art and floral design through the display of flower arrangements as interpretations of art and architecture at historic Anderson House, a Gilded Age gem that is now the headquarters of the American Revolution Institute of the Society of the Cincinnati. The four-day festival offers a unique experience in the nation’s capital to explore one of the city’s premier historic house museums filled with more than 30 floral arrangements inspired by specific artworks, furnishings, and architectural details. Details available here.

Lee Arrowood

Principal, Arrowood Advisory at Compass

M: 202.251.3175

O: 202.448.9002

lee.arrowood@compass.com

+$173M Sold In 2023

#3 Team Lead 2022

Office: 301-298-1001

Compass Real Estate is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.