DC Metro contract activity increases for fourth consecutive month

February home prices, contracts and closed sales up over 2014 levels; Days-on-market up significantly with increased inventory levels

Rockville, MD – (March 10, 2015) – The following analysis of the Washington, D.C. Metro Area housing market has been prepared by Elliot Eisenberg, Ph.D. of RealEstate Business Intelligence (RBI) and is based on February 2015 MRIS housing data

OVERVIEW

The Washington DC Metro housing market enjoyed a strong February, with year-over-year (Y-O-Y) increases in sales, prices, new contracts, inventories and median days-on-market compared to February 2014.  Closed sales increased by almost 1% from February 2014, while prices rose by 4%, new contracts rose by 7.7%, with all categories experiencing a rise, inventories rose 16.6%, and median days-on-market (DOM) rose by 50%.  The median price for single-family detached and townhomes each rose $10,000 to $470,000 and $385,000 respectively, while condos increased by $3,000 to $286,000.

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The number of closed sales increased to 2,608 with townhomes making the strongest showing, rising by 12.8% to 748 units.  The number of new contracts increased to 4,085 with single-family detached increasing by the largest percentage of 11.1% to a total of 1,938.  Inventories increased by 16.6% with condos increasing by the largest percentage at 19.9% to 2,250 units, with other classes rising almost comparably.   Regarding distressed sales, the number of short sales continues its long decline, while REO property activity has been mildly rising as of late.

CLOSED SALES

Year-over-year sales continue to rise, townhomes outperform.  For the third month in a row, closed sales increased year-over-year, albeit a mild 0.7% or 18 units.  There were a total of 2,608 sales, the best February in two years and consistent with the general market improvement displayed over the last three years.  This is the first time since October of 2013 that there have been three consecutive months of year-over-year increases. 
Sales are up by 54 units or 2.1% compared to January 2015, with townhomes leading the way at nearly an 11% increase.

Last month, townhome sales led all property segments in growth and increased 12.8% compared to February 2014.  Single family detached sales increased by 0.4% and condo sales decreased by 9.3% versus last February.   Not surprisingly, when compared to January 2015, the number of total sales increased, but by a lesser percentage than in past.  Total sales increased by 2.1% month-over-month, slightly less than the 5-year average of 4.9%.

NEW CONTRACTS

Contract activity rises for fourth straight month, all categories increase.  The number of new contracts increased 7.7% from February of 2014, to a total of 4,085.  New contracts have now risen year-over-year for four consecutive months and February contracts are at the third-highest level since February 2006.  All property segments had more contracts signed this February than last, with single-family detached leading the pace with an 11.1% rise, or 193 units.  The number of new contracts for townhomes increased by 9.9%, or 96 contracts compared to February 2014.  Contracts for condo properties were the weakest performing sector, increasing by a scant 0.4%, or just 4 units.  The month-over-month increase in new contracts of 9.8% is in line with the 5 and 10-year averages.

PRICES

Sale prices at highest February level since 2007, townhome prices rising fastest.  The median sales price in February in the DC Metro Area was $390,000, with sold dollar volume totaling more than $1.2 billion.  Comparing February 2014 and February 2015, the median sales price increased by 4.0%, or $15,000, bringing the overall median to its highest February level since 2007.   Townhome sales led with a 2.7% increase of $10,000 over February 2014 and are now at $385,000.  Single-family detached was up 2.2%, or $10,000 to $470,000.  The median sale price for condos jumped 1.1%, or $3,000, to a new median price of $286,000.  For all categories, prices are at the highest February level of this decade.

Most jurisdictions in the region showed increases in median sale prices except for Arlington County and Montgomery County. Falls Church City continues to have the highest median sales price at $712,500.  Alexandria City saw a 15.1% increase in the median sales price from $442,500 to $509,250 with a 34% increase in the number of sold listings.  Prince Georges County showed a 12.7% increase in the number of sales and a 4.1% increase in median sales price to $215,000 from $206,500 in February 2014.  Montgomery County saw a slight 1.3% increase in the number of sales but experienced a 4% decline in median sale price to $360,000.   Fairfax City saw a 3% increase to median sale price to $448,000, while Fairfax County saw a 6.9% increase from $418,500 to $447,450.  In Washington D.C., median sale price grew 6.8% from $467,500 to $499,500, but with a 9.1% decline in sales, dropping from 495 to 450.  Arlington County saw a drop in both median price and volume, with a February 2015 median price of $508,000 (down from $514,500 in February 2014) and a volume drop of 8.5% to 150.   Prince George's and Montgomery account for 42% of all DC Metro sales, but 85% of the REO sales in the region.

INVENTORIES

Inventories increase and growth rates for all property classes converging.  Active listings continue to rise and have now increased from the prior year for 17 consecutive months.  There were 8,175 active listings at the end of February, which is a 16.6% increase from last February.  There have been 14 straight months of year-over-increases in all inventory types, the first time in at least 10 years that this has been the case.   That said, February inventories of 8,175 are below the 10-year February average of 12,900, but are starting to approach the 5-year average of 8,927. 

For the first time since June 2014, townhomes did not lead in the growth of listings, superseded by condo inventory growth.  Active listings for single-family detached grew by 14.5%, or 561 listings compared to February of 2014.  Townhomes increased by 17.7%, or 225 listings, and condo listings increased by 19.9% or 373 listings. 

There was a significant 12% increase in new listings in February 2015 compared last year, with an overall increase of 527 new listings.  As was the case last month, new listings for townhomes increased by the largest percentage, at 16.7% or 174 units, followed by single-family detached which increased by 11.8% or 249 units, while condos increased by 7.8% or 98 units.  As is generally the case at this time of the year, new inventory listings have risen over the last several months. 

Days-on-Market (DOM)

At 42 days, the median days-on-market (DOM) was two weeks higher than last February, but only one day higher than the five-year February average of 41 days. February’s median DOM was three days lower than January’s 45-day level, which was the highest DOM reached since February 2012. With extremely tight supply, homes in Washington, DC continue to sell fastest, with half the homes selling in less than three weeks.  Prince George’s County listings sold next fastest, with a median DOM of 30 days. The District was the only jurisdiction where DOM did not increase compared to February 2014.

Condos saw a 72.7% increase in DOM to 38 days, detached homes increased 54.3% to 54 days and townhomes showing a 24% increase to 31 days.  The median days-on-market is now roughly back where it was in early 2012.  In early 2013 and early 2014, DOM was lower and declined quickly through summer and rose later in the year.  This year, however, the decline has so far been muted.  If trends continue, the DC Metro area may not see DOM fall as sharply in March.  

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About the RBI Metro Housing Market Update

The DC Metro Area Housing Market Update provides unique insights into the state of the current housing market by measuring the number of new pending sales, trends by home characteristics, and key indicators through the most recent month compiled directly from Multiple Listing Service (MLS) data in RBI’s proprietary database. The DC Metro Area housing market 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. 

About RealEstate Business Intelligence, LLC

RealEstate Business Intelligence, LLC (RBI) is a primary source of real estate data, analytics and business intelligence for real estate professionals in the Mid-Atlantic Region. Monthly reports for all jurisdictions in the MRIS region, along with interactive charts and graphics, can be found at http://www.getsmartcharts.com/statistics. RBI is the only company in the Mid-Atlantic region that provides timely, online access to statistical information directly from the MRIS MLS.

About Elliot Eisenberg

Elliot Eisenberg, Ph.D. is the Chief Economist of GraphsandLaughs, LLC, a firm specializing in economic consulting and data analysis.  He is a frequent speaker on topics including: economic forecasts, economic impact of industries such as homebuilding and tourism, consequences of government regulation, economic development and other current economic issues. Dr. Eisenberg earned a B.A. in economics with first class honors from McGill University in Montreal, as well as a Masters and Ph.D. in public administration from Syracuse University. Eisenberg was formerly a Senior Economist with the National Association of Home Builders in Washington, D.C.   He is a regularly featured guest on cable news programs, talk and public radio, writes a syndicated column and authors a daily 70 word commentary on the economy that is available at www.econ70.com