June’s Pending Sales Total Hit 5,124 – Highest Since 2005; Median Sales Price Increased 7.3% Year-over-Year, Highest Level in Nearly 3 Years
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Rockville, MD – (July 11, 2011) – The following analysis of the Washington, D.C. Metro Area housing market has been prepared by housing market expert Jonathan Miller of Miller Samuel, based on the June 2011 RBI Pending Home Sales Index™ released today:
Pending home sales continued their return to more consistent historical patterns, while reaching their highest June total in 6 years. The 6.9% month-over-month decline in contract signings was consistent with the 5.2% monthly decline averaged over the prior decade. The 29.5% year-over-year June increase in pending sales activity was due to the comparison with last year’s post-tax credit drop in activity, not a current surge in demand. With the expansion of new contract activity in 2011, median sales price continued to rise in June reaching $379,990, its highest level since July 2008 and was 7.3% above June 2010 and 7.5% above May 2011.
Most contract signings within the month of June since 2005. Buyers and sellers signed 5,124 contracts in June, the most for that month in six years. Pending sales jumped 29.5% year-over-year due to last year’s sharp decline in activity immediately following the expiration of April 2010 federal homebuyer tax credit, not because of a recent surge in activity. Pending sales declined 6.9% from 5,506 in May, consistent with the 5.2% average May to June decline over the prior decade as the Washington, D.C. metro area housing market continues to return to more normal seasonal sales patterns.
Median sales price reached its highest level in nearly 3 years. The $379,990 median sales price was 7.3% higher than $354,000 in the same month a year ago and 7.5% more than $353,606 in May. Median sales price has shown seasonal month-over-month increases in 4 consecutive months.
Active inventory growth leveled off as new inventory slipped. There were 15,538 active listings in June, 5.3% less than 16,404 in June 2010 and essentially unchanged from May 2011. Buyers had 10.4% fewer listings to view than they did two years ago when market conditions were weaker. The ratio of new listings to active listings has eased for 3 consecutive months to 40.8% in June which helped to keep active inventory from rising. The new pending sales market share of short sales expanded over the year to 20.1% of signed contracts from 11% in June 2010 as mortgage lenders have become more adapt at managing homeowner requests.
New contract signings outpaced active inventory as the absorption rate fell. The monthly absorption rate, the number of months to sell all active inventory at the current pace of new contract signings, declined to 3 months from 4.1 months in the same month last year. The large decline was a combination of rising new contract activity against declining active inventory as new contracts helped erode the supply of homes for sale.
Days on market fell to a10 month low of 63 days, as buyer/seller negotiability stabilized. The homes that closed in June were on the market an average of 63 days, 5 days longer than June 2010 but 5 days faster than May 2011. Days on market is measured by the number of days between the original listing date and the contract date. The 5.1% negotiability or “spread” between original list price and sales price as measured by the listing discount essentially remained stable as compared to the year ago listing discount of 4.9% and the prior month listing discount of 5%.
The RBI Pending Home Sales Index™ is a two-year moving window on the housing market using new pending sales and median sales price. 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 June 2011. The market area includes: Washington, D.C., Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City.