DC Metro December Pending Sales Slipped from 2009, Remained 10.3% Above 2008

Rockville, MD - (January 13, 2011) RealEstate Business Intelligence (RBI), an MRIS company, launched its inaugural RBI Pending Home Sales Index^TM [Washington, DC Metro Area], a two-year moving window on the housing market tracking pending sales and average sales prices. The results include pending sales from December 2008 through and including December 2010 in order to provide a robust scope of the local market starting at the first major dip in the current cycle. The two-year index shows housing prices are stable (after months of unsteady market conditions) and more importantly, pending sales activity is returning to normal seasonal patterns. The market area includes: Washington DC, Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City and Falls Church City.

“The RBI Pending Home Sales Index is up-to-the-minute data allowing RBI to provide the most current market information,” says noted real estate expert and RBI/MRIS analyst Jonathan Miller. “It is important to note that RBI provides immediate market transparency to its customers and the public, one tool being this index. Analyzing closed sales lags real time housing data, whereas RBI is examining the most current housing statistics possible. By reviewing a two-year window we get a better sense of where the market is headed even as we see a year-over-year pending sales decrease.”

Based on the data released by RBI, Miller sees five distinct market trends in the Greater DC Metro area. According to Miller:

• Lingering effect of federal tax credit expiration impacting amount of pending sales. There were 3,095 pending sales in December 2010, 3.4% less than the 3,203 contracts signed in December 2009. However, pending sales in December 2010 were 10.3% higher than in the same period two years ago just after the credit crunch began. The added incentive to purchase before the expiration of the tax credit in April encouraged many buyers to purchase earlier in the year, thus elevating the figures and in turn lowering sales activity in the latter half of 2010.
• Pending home sales activity consistent with seasonal trends. Pending home sales fell 17.4% to 3,095 sales in December 2010, from 3,746 sales in November 2010. Historically, over the past decade pending sales activity declined an average of 16.8% between the months of November and December.
• The federal tax credit for homebuyers, now expired, caused an increase in average sales price. The tax credit gained more traction with first-time homebuyers last year who tend to purchase smaller homes. Without the tax credit, December 2010 saw a more “normal” mix of home sales. The wider array of purchased property types led to a 2% increase in the average sales price from $425,280 in December 2009 to $433,718 in December 2010.
• Pending sales activity outpaced inventory but remains behind historic trends. The monthly absorption rate—the number of months to sell all active inventory at the current pace of pending sales—was 5.9 months in December 2010, a slight increase above the 5.4 monthly absorption rate in December 2009. This is slower than the 3.4 monthly absorption rate average of the past decade.
• Homes are selling at the same pace as last year but still lag long-term averages. Days on market—the number of days it took for a property to go to contract —was a negligible change moving to 76 days in December 2010, from 75 days in December 2009. The current time for a property to sell is less than the 80 day average of the past five years, but more than the 56 day average of the past decade.

“A slow, but improving economy, and termination of the federal homebuyer tax credit stimulus program earlier in the year reduced market volatility at the end of 2010,” states Miller. “In December there was a seasonal downturn in demand as consumers focused on the holidays. The tax credit expiration continued to hold down pending sales from the same period last year, yet the average sales price remained stable.
The Greater DC Metro area housing market and economy continues to buck national trends suggesting some cause for optimism in 2011.”

The full report for all jurisdictions in the MRIS region, along with charts and graphics, can be found at www.rbintel.com/statistics. RBI is the only company in the Mid-Atlantic region that provides timely, online access to statistical information directly from the Multiple Listing Service (MLS).

Miller is available for comment on this month’s RBI data, and interview requests can be sent to Charity Ross at 240-446-9885 or charity.ross@mris.net.