Continued Gains in Median Sale Price in the DC Metro Area; Up 7.8% Year-over-Year

Posted on April 10, 2012 by Corey Hart
10

Apr

2012

Active Inventory Down over 25% from March 2011 Level

Rockville, MD (April 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 the March 2012 RBI Pending Home Sales Index™ released today.

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OVERVIEW

Pricing in the DC Metro Area continued recent positive trends, with year-over-year median sale price gains in March and in the first quarter of 2012.  Active inventory remains low compared to demand, with only 3.2 months of supply. Foreclosures continue to account for a decreasing portion of the DC Metro market. March home sales were down slightly year-over-year, though new contract activity was up compared to March 2011.

KEY TRENDS

Pricing

The median sale price in the DC Metro Area followed February’s 6.0% year-over-year gain, increasing 7.8% over March 2011 to $345,000. The median sale price for the first quarter was $325,000, 4.8% higher than the same period last year. Every jurisdiction in the region, with the exception of Prince George’s County, posted an annual increase in median sales price in the first quarter. Prince George’s fell a slight 1.6% from the Q1 2011 level to $155,500. Fairfax City had a median sale price of $417,000 in Q1-2012, representing an 11.1% year-over-year increase, the largest in the region. Arlington had the next highest annual increase, with a Q1-2012 median sale price of $495,000 that was 10.9% higher than the Q1-2011 level.  Washington, D.C. rounded out the top 3 movers in median price for the quarter, with the Q1-2012 median sale price of $395,000 representing a 7.7% annual uptick.

Looking specifically at median sale price figures by property type in March 2012, the condo/co-op segment experienced the largest increase over March 2011, up 14.1% to $269,250. The detached property and townhome segments also saw increases in median sales price, up 7.8% and 4.2% respectively. The median sale price for traditional listings (those not involving a short sale or foreclosure) was $398,000, representing a nominal 1.5% dip from March 2011. While the median sale price of $184,200 for foreclosed properties was less than half the traditional listing level, it represented a 24.5% increase over the foreclosed property level in March 2011.

Closed Sales and New Contracts

Along with continued low inventory compared to demand, the composition of the sold inventory was a factor in the pricing increases in March 2011. Detached property sales were up 1.6% year-over-year, while attached property (townhome + condo/co-op) sales were down 8.4%. Foreclosure sales were down 49.5% vs. March 2011, from 721 to only 364. There were 3,345 total sales, down a modest 3.8% from March 2011. Traditional sales were up 43.2% month-over-month, while bank-mediated sales (those involving a foreclosure or short sale) were up only 10.6% over last month’s level.  1 out of 10 properties sold were foreclosures in March 2012 (10.9%), down from 1 out of 5 (20.7%) in March 2011. Short sales accounted for 14.1% of sold inventory, effectively unchanged from the March 2011 market share. 

The 5,671 new contract agreements signed in March represent a 4.4% increase over March 2011. The ten-year average February to March change in new contracts is 32.5%, but the month-over-month increase this year was only 26.0%. This may partially be the result of the unseasonably warm February driving up purchase activity compared to year’s past and not necessarily be indicative of any cooling in the market. The Virginia jurisdictions and the District all experienced an increase in contract activity compared to March 2011, but Montgomery County and Prince George’s County saw 1.4% and 2.2% annual declines respectively. New contract agreements on detached properties in the DC Metro Area were up 8.5% year-over-year and there was a 4.0% year-over-year uptick in new contracts on condo/co-op properties. New contracts signed for townhome properties were down 3.0% vs. March 2011. 

New Listings and Active Inventory

While the low inventory level compared to buyer demand continues to be a key story in the DC Metro Area (March closed with 3.2 months supply of inventory), the 6,909 new listings added in March is only 2.2% lower than the 7,066 new listings added in March 2011 and is only 6.1% off the five-year March average. There were 6.5% less newly listed townhomes than the previous March, resulting in another month where townhome properties have the lowest supply of inventory, with only 2.1 months (compared to 3.1 months for condo/co-ops and 3.7 months for detached properties).

The number of new traditional listings, those not involving foreclosures or short sales, was actually 6.9% higher than last March, marking the third consecutive month with an annual increase in new traditional listings. Only 1 in 20 new listings are under foreclosure (4.8%), down from 8.9% last March and 1 in 10 listings in March 2010 (10.4%). The 335 new foreclosures listed were 46.6% less than the 627 in March 2011; however this does represent a 20.5% increase over new foreclosure listings in February, the highest month-over-month increase since March 2010. While this is only the second time in the last 12 months where the region has experienced a month-over-month increase in new foreclosure listings, it is worth monitoring as rumors of a shadow inventory of foreclosures persists.

The modest decrease in new listing activity compared to increased purchase activity leaves active inventory in much the same position as last month leading into the spring: DC Metro Area can be classified as a seller’s market. Barring unforeseen economic events, the 3.2 months of supply coupled with historically low interest rates and a relatively stable regional economy should indicate a healthy spring housing market.  The 10,503 active listings to close March represent a 26.4% dip from March 2011 and are 37.3% lower than the five-year March average.

As bargain hunters have made a significant dent in the active foreclosure market over the past few years and relatively few new foreclosures having entered the market of late, active foreclosures are down 67.4% from the same time last year. Active short sales are down 44.2% from March 2011 and represent 16.1% of active inventory vs. 21.3% of active listings last March. Less than 4 out of 100 active listings (3.5%) are foreclosures, down from 7.9% in March 2011. With 8 of 10 (80.4%) active listings being traditional (not bank-mediated) compared to 7 of 10 in March 2010 (70.9%), there is less downward pressure on pricing in most communities. More than half of the active foreclosures in the DC Metro Area (55.0%) and 61.8% of the active short sales are in Prince George’s County, so the majority of the region has an even healthier traditional-to-distressed ratio in the active market.  This should bode well for sellers this spring.

The RBI Pending Home Sales Index™ is a two-year moving window on the housing market using new pending sales (signed contracts) and median sales price (closed sales). It provides unique insight into the state of the current housing market by measuring the number of new pending sales for each month through the most recent month.The results include new pending sales through and including March 2012. The market area 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.

DC Metro Area, market analysis, press release
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