Signs of Strength Continue Thru Summer in DC Metro Housing Market

Median price up $29K from a year ago, new contracts at 7-year August high

OVERVIEW

Demand remains strong in the Washington DC Metro housing market in August, as many indicators reach multi-year highs.  Sales rose to their highest August-level in three years, and new contracts reached their highest August-level in seven years.  Prices continue to climb, up year-over-year for the seventh straight month, and their highest August-level in five years.  Low inventory of active and new listings persists, and is playing a major role in the price appreciation.

Many people are likely keeping their homes off the market due to continued economic uncertainty, preferring to wait it out.  It is also likely that homeowners in some communities would still face equity losses if they were to sell at the current price points, which could be deterring many from entering the market.  The condo market remains strong with double-digit growth in sales and new contracts compared to last year, higher than townhomes and detached homes.

Rockville, MD – (September 10, 2012) – The following analysis of the Washington, D.C. Metro Area housing market has been prepared by RealEstate Business Intelligence (RBI) and the GMU Center for Regional Analysis and is based on August 2012 MRIS housing data.

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CLOSED SALES

Summer sales remain strong compared to last year; four months of double-digit condo growth.

There were 4,062 sales in August in the Washington DC Metro Area, a 6.4 percent increase from this time last year, and the fifth consecutive year-over-year gain.  The region experienced a 2.4 percent drop in sales from last month, but this is in line with the 10-year July to August average of -2.2 percent.  Sales are up across all property segments compared to last year, which is an indication of continued market strength.  Sales of detached homes rose 4.7 percent compared to August 2011, and townhome sales increased 5.1 percent.  The condo market continues to lead all segments in year-over-year sales growth for the third consecutive month, increasing 12 percent from this time last year. 

PRICES

The metro median home price remains virtually unchanged from July, but is up $29K from last year.

At $385,000, the median home price in the DC metro area is 8.1 percent higher than August 2011.  This is the seventh consecutive year-over-year increase for home prices, which is being driven by strong demand and consistently low inventories.  Historically, median prices tend to decrease between July and August, falling eight out of the last 10 years.  The low inventory and strong sales appear to be keeping prices at July levels this year.  All but two jurisdictions in the metro area had year-over-year price gains in August, the highest occurring in Alexandria City where the median price rose 23.3 percent to $484,000. 

Across the metro area, the median price for detached homes rose 7.9 percent from last year, a $35,000 gain in value.  Townhomes and condos rose 6.9 and 6.3 percent respectively, increasing $23,175 and $16,500 in value.  Year-to-date median prices are up in all jurisdictions and rose 6.4 percent for the metro area from this time last year.

NEW CONTRACTS

New contracts unseasonably strong in August, highest August-level since 2005.

There were 4,482 new contracts signed in August in the metro area, up 7.5 percent from this time last year.  While the number of new contracts declined slightly from July, the 1.9 percent decline is less than the 10-year July to August average of -7.2 percent.  As with sales, all property segments posted year-over-year gains in new contracts with condos leading the way at 15.7 percent.  Demand for condos remains strong, and is likely driven by their more competitive price points.   The number of new contracts for detached homes and townhomes rose 2.3 and 9.9 percent respectively compared to August 2011.

INVENTORY

Active listings at lowest August-level in eight years; historic lows continue for new listings.

There were 9,191 active listing in the Washington DC Metro Area at the end of August, 35.8 percent below this time last year, and the lowest August-level since 2004.  The number of active listings in the metro area continues to shrink, and is down year-over-year for the 18^th consecutive month.  The pattern appears to be holding, as the 4,769 new listings entered in August are the lowest August-level on record with metro-wide data available back to 1997.  The low inventory of homes for sale is driving down the median days on market, which at 26 days is 11 days below August 2011.  The sales-to-list price ratio has also been impacted by the low supply, and is up to 96.2 percent from 94.2 percent a year ago.  Economic uncertainty is likely keeping many people in their homes.  Equity losses could also be playing a role, as homeowners hold out in hopes of further price appreciation.

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. 

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 with business interests in the Mid-Atlantic region. The full monthly data report for all jurisdictions in the MRIS region, along with interactive 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 MRIS Multiple Listing Service (MLS). 

About the Center for Regional Analysis at George Mason University

The Center for Regional Analysis conducts research and analytical studies on economic, fiscal, demographic, housing, and social and policy issues related to the current and future growth of the Virginia, Maryland, and DC areas. Through its range of research and programs — major economic impact studies, economic forecasts, fiscal analyses, conferences and seminars, publications, information services, and data products — the Center’s activities strengthen decision-making by businesses, governments, and institutions throughout the Greater Washington region.  Visit http://cra.gmu.edu to learn more.