DC Metro Closes 2011 with Lowest Inventory Level since August 2005

Foreclosed Inventory & Sales Down Sharply to Close 2011

Rockville, MD – (January 10, 2012) – The following analysis of the Washington, D.C. Metro Area housing market has been prepared by RealEstate Business Intelligence (RBI), and is based on the December 2011 RBI Pending Home Sales Index™ released today.

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OVERVIEW

The number of contracts signed in the Washington, D.C. Metro Area for the month of December outpaced the five-year December average pace by 22.1%.  The 3,169 closed sales represented an 8.3% month-over-month increase from November, consistent with seasonal patterns. Inventory levels continue to shrink compared to years past, with 10,684 active listings to end the year representing the lowest level since August 2005.  Foreclosed inventory is down sharply year-over-year as 58.5% fewer foreclosed properties were newly listed compared to December 2010.

KEY TRENDS

• December contracts consistent with seasonal patterns. There were 3,250 contracts signed in December, 14% less than the previous month, but right on pace with the 10-year December average of 3,254. The 10-year average decline in new contracts from November to December is 15.8%. New pending sales were 1.7% higher than December 2010.
• Stability in pricing to close 2011.   The $325,000 median sales price in December 2011 represents a nominal 3% decrease month-over-month and a decline of 3.7% from December 2010.  The December 2011 level is 1.6% higher than the $320,000 median sales price of December 2009.  With a relative shortage in inventory compared to demand, represented by only 3.2 months supply of inventory to end the year, it is expected that upward pressure on prices will continue in 2012. 

• Lowest active inventory since August 2005, foreclosures down sharply. The D.C. Metro Area market ended 2011 with the lowest inventory level since August 2005 with only 10,684 active listings. This represents a 22.5% decline from December 2010 levels.  Only 1 in 20 (5.6%) active listings are under foreclosure, a significant decrease from the 11.2% foreclosed market share in December 2010. Short sales, on the other hand, make up 22.9% of the market at the end of 2011, effectively unchanged from the 22.8% market share for short sales in December 2010.  The 327 new foreclosure listings entering the market in December was 58.5% lower than the same period last year. New listings added in December were down 17.6% year-over-year to 2,712 new listings. 

• Increase in closed sales consistent with seasonal patterns; spike in closed short sales.  There were 3,169 closed sales in December 2011, an 8.3% increase from the November 2011 level, consistent with seasonal patterns (the 10-year average month-over-month increase for December is 8.9%). The 401 foreclosed sales in December 2011 represented a month-over-month increase of 15.2%, but a decline of 42.4% from the 696 level of December 2010. The 461 closed short sales, on the other hand, represented a 22.0% increase over the 378 level of December 2010. 

The RBI Pending Home Sales Index™ is a two-year moving window on the housing market using new pending sales (signed contracts) and median sales price (closed sales). It provides unique insight into the state of the current housing market by measuring the number of new pending sales for each month through the most recent month. The results include new pending sales through and including December 2011. The market area includes: Washington, D.C., Montgomery County and Prince George’s County in Maryland, and Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City in Virginia.