DC Metro November Sales Up 21.5% Over Last Year; Prices up 10.5%

Demand for Townhomes remains strong causing the median sale price to jump $54K

OVERVIEW

The surge in new contract activity last month translated into a rise in sales for November. Sales are higher than last year, but new contracts are down slightly compared to November 2011. This could be an early indication of tempered demand in the market. The inventory of homes for sale continues to shrink, and new listings remain at their lowest level in over a decade. The low supply is putting upward pressure on median sales prices around the region. Price gains have been most pronounced in the townhome segment, which has led in year-over-year growth for 3 consecutive months. Townhomes also lead all segments in sales growth, and active inventory declines, which indicates strong demand for these properties. As the year-end approaches, the market tends to slow down, which will likely equate to an even lower supply of homes for sale in the coming months. Buyer demand has been consistent, but seller participation in the market remains low. This is due to both economic uncertainty and potential equity losses in many areas. With the Federal Reserve’s September announcement of continued low interest rates through 2015, it is feasible that many buyers will wait it out until more options become available in the market. This could mean slower sales and stable prices in the near-term.

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CLOSED SALES

Unusual surge in sales in November for all property segments, townhomes lead growth.  There were 3,556 sales in November in the Washington DC Metro Area, a 21.5 percent gain from this time last year, the highest year-over-year jump since May 2010. Sales typically fall between October and November in the region, but the surge in new contracts in October has caused overall sales numbers to rise 8.8 percent from last month. Similar month-over-month gains have occurred in all property segments. Townhomes led in growth, up 31.4 percent from last November. Condos and single-family homes rose 22.0 percent and 16.2 percent respectively. All property segments had their highest November sales in 3 years.

PRICES

Median sales price continues to climb late in the year; Townhomes see highest price gains since 2005. At $370,000, the median home price in the DC Metro Area is 10.4 percent higher than this time last year, and the highest November median in 5 years. The inventory of active listings continues to diminish while demand remains strong. These dual trends are pushing the median sales price up in most parts of the region. Falls Church City leads all jurisdictions with a 40.7 percent gain from last November, however medians there tend to be volatile due to the low quantity of homes sold. All other jurisdictions within the DC Metro region experienced median price gains with the exception of Alexandria City, which fell 3.5 percent from this time last year. Townhomes had the sharpest median sales price growth of all property segments, up 16.9 percent from November 2011, an increase of $54,000. This is the highest year-over-year gain for townhomes in 7 years. The median sales price for condos rose 10.7 percent from this time last year, and prices for single-family homes rose 10.0 percent.

NEW CONTRACTS

New contracts fall in line with seasonal patterns, though slightly lower than November 2011. There were 3,732 new contracts signed in November in the DC Metro region, down 1.3 percent from this time last year, and a drop of 16.3 percent from last month. New contract activity typically falls between October and November. The 10-year average monthly decline for November is -13.2 percent. All property segments had a slight decline in new contracts from last November, with the exception of condos, which remained about the same. The unseasonable rise in new contracts last month could have muted the numbers this month as many buyers may have purchased earlier than planned. It could also be reflective of the low inventory of homes for sale. Buyers have fewer options, so many could be waiting it out.

INVENTORY

Active listings drop below 8,000 for the first time since June 2005; new listings remain the lowest in over a decade. There were 7,830 active listings in the DC Metro Area at the end of November, 37.8 percent lower than this time last year. The inventory of active listings is now about one third of its peak, which was over 25,000 in the fall of 2007. All property segments continue to see inventory absorption, with active listings down over 40 percent across the board from last November. Townhome listings represent only 17.1 percent of all active listings, the lowest proportion on record with data available back to 1997. New listings are following a similar pattern, though the declines are not as dramatic. The 3,428 new listings are 7.7 percent lower than November 2011, and all property segments had the lowest new listings in over a decade. The low inventory of homes for sale continues to drive down the median days on market, which at 22 days, is half of what it was just a year ago. The average sale-to-list-price ratio also continues to rise, up to 96.6 percent from 93.7 percent last November.

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). Visit rbintel.com or www.facebook.com/rbintel to learn more.

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.