DC Metro Price Increases Continue into August as Demand Remains Strong

Even with double-digit gains in new listings, overall inventory remains low

OVERVIEW

Demand remained strong in the Washington DC Metro Region in August.  The number of sales and pending contracts increased.  Inventories continue to decline, but the pace has slowed to a single digit year-over year decrease.  New listings continue to increase and mitigate the decline of inventories.  Demand for smaller units in the market continues to drive much of the overall sales.  Sales of units smaller than 800 square feet increased by 35.6 percent from last August, which is over double the 13.8 percent increase for all units.  Condo sales drove the majority of the increases in both sales and new contracts.  Units between 800 and 1,000 square feet had a median sales price increase of 21.7 percent, or nearly three times the 7.8 percent increase for all units.  The overall high demand and low supply contributed to median sale price gains within the region and resulted in the highest August-level median sales price in eight years.  The median days-on-market continues to be historically low, and is now at its lowest August-level since 2005.  Rising prices and strong demand may encourage new sellers to enter the market, increasing new listings and helping to meet pent up demand.

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CLOSED SALES

Fifth consecutive month of double-digit sales growth for the region.  There were 4,621 sales in August in the Washington DC Metro Area, 13.8 percent more than a year ago, and the highest August-level since 2006.  The number of sales decreased 6.7 percent from last month. This is a sharper decrease than the 10-year average July to August decrease of 2.5 percent.  However, the number of condo sales actually increased from last month and were the only property segment do so.  Condos also had the strongest sales growth, year-over-year, of the property segments, increasing 28.8 percent from August 2012 and accounting for over half of the total growth in sales.  This is the highest year-over-year growth rate for condo sales for the past three years.  The lower price-points and smaller unit size of condos may be attractive to first time homebuyers and investors, contributing to the strong demand.  Townhome sales increased 11.6 percent from last August, which is the seventh consecutive month of double-digit growth for this indicator.  Single-family detached home sales increased by 7.4 percent from this time last year.

PRICES

Highest August-level median price since 2007.  At $415,000, the median sale price in the Washington DC Metro Area is 7.8 percent higher than this time last year, an increase of $30,000.  This is the highest August-level since 2007.  Detached homes led all property segments in median sale price rate of growth, increasing 11.3 percent from August 2012 for a gain of $54,000.  The median sales price for townhomes in the region increased 8.6 percent, or $31,000, from this time last year.  Condo property median sale prices rose 7.7 percent, a gain of $21,250 from last year.

Among the jurisdictions in the region, Prince George’s County had the highest growth rate, increasing 19.4 percent from August 2012.  This was the sixth consecutive double-digit increase for this indicator for Prince George’s County, and resulted in its highest median sales price since the fall of 2009.  Arlington and Alexandria were the only jurisdictions with a decline in median price, decreasing 2.3 and 1.6 percent, respectively.  The year-to-date median sale price for the region as a whole is now $402,500, a 10.3 percent gain from the $365,000 level for the same period last year.

NEW CONTRACTS

Slight increase in contracts driven by condos.  There were 4,536 new contracts signed in August, 1.2 percent, or 54 contracts, more than this time last year.  This is the highest August total since 2010.  New contracts fell 9.5 percent from July, a sharper decline than the ten-year average of 6.8 percent and was evenly distributed among the property segments.  The increase in new contracts as compared to this time last year was driven by new contracts for condo properties.  Condos were the only property segment that had more new contracts than August 2012, increasing 6.6 percent, or by 75 contracts.  Both detached and townhome segments saw nominal declines in new contracts versus this time last year, down 0.3 percent (7 fewer contracts) and 1.0 percent (12 fewer contracts), respectively.

INVENTORY

Overall inventory still declining; new listings continue to increase.  There were 8,301 active listings in the DC Metro Area at the end of August, a decrease of 9.7 percent, or 890 listings, from this time last year.  Active listings continue to decline across all property segments relative to last year, and are at their lowest August-level in eight years for single-family detached homes and nine years for condo properties.  There were 1,420 townhome listings, which is the lowest August-level on record, with data available back to 1997.  Despite the decline in total active listings, the pace of the decline has slowed.  The year-over-year change is the mildest decline in two years and is the first single-digit drop during that time.  New listings have increased by 11.4 percent from this time last year, for a total of 5,311 new listings in August.  This is the fifth consecutive month of double-digit growth for this indicator and the highest August-level of new listings in three years. 

Condos continue to lead all property segments in new listing growth, increasing 17.4 percent from last August.  New listings of single-family homes increased 10.7 percent, and townhome listings increased 7.1 percent from this time last year.  At 14 days, the median days-on-market for the DC Metro Area is the lowest August-level since the peak of the housing boom in 2005.  Given the historically low number, it is possible that many of the new listings are going to contract the same month they are listed.

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 bulk of this report’s content is readily available, down to the ZIP code level of granularity, via interactive charts and reports offered via rbiEXPERT, a premium subscription service offered to real estate professionals interested in growing their business with the help of industry-leading and user-friendly analytics. 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.