DC Metro Prices Hit Record May High

Lowest median days-on-market since the peak of the housing boom

OVERVIEW

The housing market in the Washington DC Metro Area continues to post strong growth as we approach the summer season.  Sales are at a seven-year high for May, and new contracts are back to peak housing boom levels.  The median sale price for the region is rising and posted the highest May level on record. The median sale price is now over $30,000 higher than May 2012, and over $70,000 higher than May 2011.  It appears that the rising price points could be enticing more sellers to enter the market, as new listings are up nearly 20 percent from this time last year, reflecting back-to-back months of double-digit growth for this indicator.

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Despite the recent surge in new listings, the overall inventory of active listings continues to decline and is historically low, evidence that sales continue to outpace new listings.  All property segments are showing signs of health, with condos leading in sales growth, townhomes leading in new contract growth, and single-family detached homes leading in median price growth.  At nine days, the median-days-on-market is the lowest it’s been since the summer of 2005, and the average-sales-to-list price ratio now stands at 98.6, the highest of any month since October 2005.  It is likely that the region will see somewhat slower sales as the summer progresses, which is typical of seasonal market patterns.  If new listings continue to grow, this could help alleviate some of the inventory shortage, and take some pressure off prices.

CLOSED SALES

Double-digit sales growth continues, condos post highest sales of any month in over seven years.  There were 5,088 sales in May in the Washington DC Metro Area, 13.6 percent higher than this time last year, and the highest May total in seven years.  Sales are up 20.2 percent from last month, which is well above the 10-year average change of 13.2 percent, further evidence of strong demand in the market.  Condos remain the fastest growing property segment in terms of sales growth rate, rising 21.1 percent from this time last year.  There were 1,286 condo sales in May, which represents the highest total the region has seen for any month since June 2007.  Townhome sales rose 18.4 percent from last May, and the number of single-family detached sales increased 8.1 percent.

PRICES

The median sale price continues to climb for most of the region; Alexandria and DC post record highs.  At $424,800, the median sale price in the Washington DC Metro Area is 8.2 percent higher than last May, and the highest median sale price for the month of May on record.  The low inventory of homes for sale, coupled with strong demand, continues to put upward pressure on prices.  Single-family detached homes led all property segments in price growth, up 8.2 percent from this time last year, a gain of $60,000.  This is only 4.2 percent off the highest May on record for this segment (2007). The median price for townhomes in the region increased 11.1 percent, a gain of $40,000. This is the highest May level for townhouses since 2005. The median sale price for condos rose 5.4 percent, a gain of over $15,000. 

At the jurisdiction level, Prince George’s County continues to lead in terms of price growth rate, with the median sale price up 18.8 percent from this time last year.  Both Alexandria City and the District of Columbia posted their highest median price on record at $525,000 and $490,000, respectively.  The median sale price fell in Falls Church City and Fairfax City, however prices tend to be volatile in these jurisdictions due to the low quantity of sales.

NEW CONTRACTS

There were 5,951 new contracts signed in May, up 6.4 percent from this time last year, and the highest Maytotal since the height of the housing boom in 2005.  Townhomes led all property segments in growth, rising 12.5 percent from this time last year, the sharpest gain in nine months.  New contracts on condos and single-family detached homes rose 9.8 and 1.9 percent, respectively.  New contract totals for all property segments are at multi-year highs for May.  There were 1,510 townhome contracts, which is the most since May 2006.  There were 1,496 new contracts on condos, and 2,942 new contracts on single-family detached homes, the most for both segments since May 2005.

INVENTORY

Active listings continue to decline; however, new listings post sharpest growth in over three years. There were 7,998 active listings in the DC Metro Area at the end of May, a drop of over 2,500 listings from May 2012.  Active listings remain at historically low across all property segments, particularly townhomes, which at 1,338, are at their lowest May-level since 2003.  Despite the continual decline in active listings, new listings are on the rise for the second month in a row.  There were 7,276 new listings in May, up 19.6 percent from this time last year, the sharpest gain of any month since April 2010.  Condos led all property segments in new listing growth, rising 25.6 percent from last May.  New listings of townhomes and single-family detached homes rose 22.2 percent and 15.8 percent, respectively.  The persistent decline of inventories concurrent with the recent surge in new listings indicates that demand in the market is absorbing the influx of inventory.  Based on the historically low median days-on-market, it is possible that many of the new listings are going to contract the same month they are listed.  The median days-on-market for the DC Metro Area is now nine days, the lowest level of any month since the peak of the housing boom in the summer of 2005.

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.