Median DC Metro Area Sale Price Hits $400K, First Time Since 2008

Rockville, MD – (July 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 June 2012 MRIS housing data.

OVERVIEW

Median sale prices continue to climb through most of the Washington Metro Area.  Price gains, decreasing days-on-market (average down 10 days from June 2011), and a tightening sale-to-list price ratio (up 2.0 percentage points from June 2011) are evidence that the diminishing inventory of homes for sale in the region is having an impact on the market.  The DC Metro Area posted its 16^th consecutive month of year-over-year declines in active listings, and the pattern appears to be holding as new listings in June are at a historic low.  The condo market is showing signs of strength, outpacing detached homes and townhomes in June on year-over-year growth in sales, median price gains, and new contracts.

CLOSED SALES

Sales continue to rise in June, and the condo market is picking up steam.  The Washington, DC Metro Area posted 4,665 sales in June, a 5.7 percent increase from June 2011, and the third consecutive month with year-over-year gain in sales.  Despite the continuing gains over last year, the month-over-month growth is somewhat muted.  The 4.2 percent growth in sales between May and June is well below the 10-year May to June average of 14.1 percent.  This is likely attributed to the accelerated winter and spring selling seasons in the region resulting from mild temperatures and pent up housing demand.  Many buyers may have purchased homes earlier than expected due to these conditions.  Sales of detached homes grew 3.6 percent compared to last year, and townhome sales increased 2.7 percent.  The largest growth occurred in the condo segment.  The 1,133 condo sales in June represent a 13.9 percent increase from last year, and the second consecutive month of double digit year-over-year growth.

PRICES

The median sale price for the metro area has reached $400,000 for the first time in four years.  Home prices throughout the DC Metro Area continue to climb.  Metro-wide, the median sales price grew by 5.3 percent compared to last year, the fifth consecutive month of year-over-year gains.  The last time the median sales price reached the $400,000 mark was June of 2008.  With the exception of Falls Church City, VA, all jurisdictions in the region experienced year-over-year growth in median sales price in June.  At $413,000, Montgomery County, MD led the way posting an 8.4 percent increase compared to the June 2011 level of $381,150. The condo market experienced the sharpest growth with the median sales price rising 12.0 percent from this time last year, a $30,000 increase in value.  Year-to-date medians are also on the rise, up 7.5 percent to $360,000 for the metro area.

NEW CONTRACTS

The volume of new contracts declined between May and June, in line with seasonal patterns. There were 5,086 contracts signed in June in the DC Metro Area, down 9.1 percent from the 5,593 contracts last month, and slightly below the June 2011 level of 5,124.  This is the first year-over-year decline in new contracts in 14 months.  Historically speaking, new contract volumes have declined between May and June nine out of the past ten years in the metro area, however this is the sharpest decline since 2007.  The condo market is the only property segment to post year-over-year growth in this category, rising 5 percent compared to June 2011.  Contracts on detached houses fell 1.2 percent, and townhomes fell 4.8 percent from last year.  New contracts on all property types are down from last month.  The overall proportion of new contracts remains relatively unchanged, with detached homes accounting for about half of the volume, and townhomes and condos each making up about a quarter.

INVENTORY

Active listings in the Washington DC Metro Area continue to shrink, June volume of new listings at historic low.   There were 10,374 active listings in the DC Metro Area at the end of June, 33.2 percent below June 2011, and 32.2 percent below the 10-year June average of 15,291.  This is the 16th consecutive month of year-over-year declines in active inventory.  The same trend can be observed with new listings.  In fact, the 5,588 new listings entered in June are the lowest June-level RBI has on record, with metro-wide data available back to 1997.  The diminishing volume will continue to put upward pressure on prices, and if buyer demand continues to pick up, average days-on-market and sale-to-list ratios will likely tighten.  As noted previously, the low supply also indicates that many potential sellers may still be wary of their financial situations, and are more comfortable remaining in their current homes.

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.

UPCOMING PUBLICATION:  Distressed Housing Analysis

Next week, RBI will publish the Mid-Year Distressed Housing Report. This report will take a deeper dive into the state of bank-owned foreclosures (REO) and short sales and how prices are trending between distressed property segments and traditional sales (those not requiring bank or third-party approvals). Included in the report, RBI will be releasing brand new statistics examining transaction failure rates and contract-to-settlement trends by distressed property segment.  The report will also include changes in the distressed share of the market for most MRIS jurisdictions, comparing year-to-date percentage of sales impacted in the first half of 2012 versus the first half of 2011.  Be sure to check www.rbintel.com/blog the week of July 17 for this new publication.