07/16/2026
Market Update (July 16, 2026)
Busy, busy!
It is the culmination of the spring market, with closings piling up and inventory still peaking. I love summer in Poolesville! With another amazing Fred Swick Falcon Basketball Camp under our belts and the heat of July erasing the chill from a cold winter, it's time to wrap up our spring market with home settlements and families moving in bunches.
Thank you to all of my buyers and sellers for working with me! Don't forget I can help you get your house ready for sale and I have labor, trucks, and a dumpster ready to help along the process!
To get this market update rolling, we should recognize that, over the past four years, the market has swung somewhat irrationally between hot and cold at least a dozen times. Consistency has been rare, which makes my "boots on the ground" perspective from especially valuable.
Over the past few months, however, the market has become surprisingly predictable. Everyone seems to be on edge, waiting for the next shoe to drop, a meaningful change in interest rates or simply a reason to feel excited about entering the market again.
That collective hesitation has created a more muted and cautious marketplace for most buyers and sellers. Yet the same pattern continues to play out: the market remains extraordinarily difficult for most people and strangely charmed for a select few.
TWO DIFFERENT MARKETS AT THE SAME TIME
After nearly 18 years in real estate, from my perspective, what stands out most about this market is not that it is universally strong or weak. It is that two completely different markets seem to be operating at the same time.
For buyers looking for a renovated home in a top school district (like ours in Poolesville), particularly one that appeals to affluent move-up buyers, competition remains very real. Those buyers should expect limited leverage and may still need to compete aggressively, assuming their target homes are priced, prepared, and marketing correctly.
The awkward part comes when those same buyers turn around to sell the starter home they are leaving because of the schools, size or some other shortcoming. They often expect to receive the same treatment they just encountered as buyers. In many cases, they will not. It is almost the inverse of the old Realtor cliché that it is always a good time to buy or sell. For many move-up buyers, this market has somehow managed to be a difficult time to do both. When has that ever happened?
A SURPRISINGLY PREDICTABLE DIVIDE
The repetitiveness of the market has at least made the outcomes easier to predict. Lately, my expectations for how a listing will perform or how a buyer’s offer will be received have been almost eerily precise. Not because the entire market is predictable, but because the same divisions keep repeating themselves.
I recently listed a home where the sellers initially hoped to ask $1,035,000. We ultimately listed at $1,020,000, still hoping the lower price would generate multiple offers. I predicted that we MIGHT get multiple offers but we were on the high end of the scale based on condition (good) and other factors (needing a few updates). We eventually settled for just under $1mm.
I made that prediction because I had watched nearly the same scenario unfold with another listing the week before. On the other side, I have consistently advised my hesitant buyers to submit the offer they are comfortable making, even if it is below asking and there is competition.
There is a pervasive assumption that a new listing, or even the mention of another offer, means buyers must immediately become aggressive. It simply is not true. I can think of dozens of transactions where the mere suggestion of competition, whether it ultimately materialized or not, prompted an inexperienced agent and anxious buyer to submit an unnecessarily strong offer out of fear of missing out.
There are exceptions, especially for the best homes in the most competitive neighborhoods. But this is also one of the least affordable markets we have ever experienced. Mortgage rates are hovering near 7 percent, inflation is a concern and uncertainty is everywhere. There is no reason to act irrationally simply because another offer may exist. Buyers are not alone with their concerns. Below-asking offers can work, even in multiple-offer situations. In the right segment of this market, they have been working consistently.
WHERE IS ALL THE MONEY COMING FROM?
I recently came across a graphic showing just how dramatically home prices have outpaced earnings. Over the past decade, home prices increased by roughly 55 percent after remaining essentially flat during the decade before it. Wages, meanwhile, rose only about 31 percent.
The comments were filled with debate over how that gap eventually closes. Do wages catch up, or do home values come down? But that misses the more interesting question: If incomes have fallen so far behind housing costs, where is all the money still supporting these prices coming from?
Recent lender and settlement surveys in measurable mini-markets, like Poolesville, have shown purchasing power is increasingly coming from existing home equity, accumulated wealth, investment gains and family money rather than wages.
That helps explain how affordability can be historically terrible while home prices remain remarkably resilient. One comment beneath an article I recently read said it better than I could: “Fundamentals are broken. Money printing has created extraordinary distortions and an enormous concentration of wealth.” It may be overstated, but it captures why offering meaningful and honest commentary on this market has become so difficult.
WHAT I EXPECT IN THE SECOND HALF
I do not expect the second half of 2026 to bring a dramatic reset. The more likely outcome is a continuation of what we are already seeing, only with fewer buyers and sellers as the normal seasonal slowdown takes hold.
Mortgage rates will continue to dominate the conversation, but small movements will not change much. A drop from 6.5 percent to 6.25 percent will not suddenly improve sentiment, unlock inventory or make homes affordable again. It would take a meaningful and sustained decline to convince homeowners with low rates to sell or bring sidelined buyers back in force.
(Side Note: I have seen more buyers with VA loans, using lower rates than conventional loans, stepping into this housing market. VA buyers --- thank you for your service!). I've got great lenders to work with!
That means the divide should continue. The best homes in the best locations will remain competitive because there are never many of them available. Homes with compromises, particularly those that are dated, poorly located or aggressively priced, will face a smaller and increasingly selective buyer pool.
I also expect more inventory from owners who purchased during the past few years. Some will be responding to ordinary life changes, while others will be confronting payments they expected to refinance by now. Those buyers are starting to feel the pressure of those high rates.
The economy remains the largest variable. If inflation stays elevated and mortgage rates move above 7 percent for any sustained period, the market will shift firmly into a buyers market, same as we have seen time after time these last four years. If rates fall meaningfully, demand will probably return faster than inventory, recreating what we saw during the first quarter.
My best prediction is not a boom or a crash. It is more of the same: a selective and uneven market that rewards quality and punishes wishful thinking. Buyers will find opportunities, but probably not on the homes everyone else wants. Sellers can still achieve respectable results, but only if their home prep, marketing, and pricing reflects the market they are actually in. The second half of 2026 will be defined by who understands which market they are in.
