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!

market adjustments

While summer always brings a seasonal slow down in real estate, this year we are witnessing a broader adjustment in the market. In order to advise clients well, it's important to understand what’s shifting and what remains steady.

The luxury and ultra luxury markets remain strong. Since May 1, 116 homes listed for $3M or more have gone under contract across the DC Metro. And year to date, we’ve seen two sales above $10 million and two closed sales above $20 million.

But beyond that top tier, this is a market that requires thoughtful planning. As always, well-designed properties in desirable neighborhoods that are move-in ready continue to attract strong buyer interest. Success isn’t about simply being in the market - it’s about having a clear strategy and smart execution.

To understand today’s market, it’s helpful to rewind a bit. The years following the pandemic, especially 2021 and 2022, were defined by record-low interest rates, surging demand, and very limited inventory.

That imbalance pushed prices higher at an unsustainable pace. The market was bound to normalize, and we’ve been in a correction phase over the last 18 to 24 months. While real estate is no longer appreciating at the rapid pace we saw during the height of the pandemic, it is growing at a healthy and more sustainable rate.

Compared to this time last year, our team’s sales volume has more than doubled. Why? Because we’ve adjusted to a changing market and continue to guide our clients through every nuance, from pricing and presentation to timing and negotiation.

Bottom line: this is still a market full of opportunity, but strategy matters. Whether you’re buying, selling, or just exploring your options, my team and I are ready to help you navigate with confidence.

real estate & the news

• Economists’ outlook improved slightly from the last survey around the time of massive tariff announcements, but remains relatively downbeat mostly because of the persistence of trade uncertainty and muted growth to date. On average, they expect GDP adjusted for inflation to grow 1% in the 4th quarter from a year earlier....up from an April forecast of 0.8%, but just half of what they expected in January. They see growth rebounding to 1.9% in 2026, little changed from prior surveys. They put the probability of recession in the next 12 months at 33%, down from 45% in April. Unless growth accelerates, the US debt remains unsustainable. (WSJ)

• People earning $10 million or more reported receiving 39% of their income via long-term capital gains in 2022 which is taxed at a rate of 23.8%, roughly two thirds of the taxes owed via regular income. Opportunity Zones help investors reduce capital-gains taxes. Investors roll gains into a special fund to defer taxes. They get a 10% tax reduction if they hold the Opportunity Zone investment for 5 years—and triple that for rural investments under a new provision. The Opportunity Zone investment itself can be free of capital-gains taxes after 10 years. (WSJ)

• 99.8% of people dying annually will not be subject to estate taxes, further fueling the $120 trillion-plus transfer of generational wealth over the next 25 years. MIllennials will be the primary beneficiaries. (WSJ)

around dc

LIVE! Lunchtime Concert Series

Wilson plaza

From salsa to strings, and blues to swing, Live! Concert Series on the Plaza features hot entertainment for the downtown DC community.

From July 7 through September 26, 2025, noon - 1:00pm on Wilson Plaza, join us for free lunchtime performances featuring the area's most talented entertainers. Enjoy a variety of musical flavors, such as Go-Go, jazz, bluegrass folk, reggae, rock, country, pop rock and more. There is plenty of outdoor seating, so take the Metro, grab lunch and spend the afternoon grooving.

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