DC Metro home prices were up 9.6 percent in 2013

Buyer activity in December recovers from November slump; Cumulative 2013 sales up 9.3 from 2012 total

OVERVIEW

As 2013 comes to a close, the housing market in the Washington DC Metro Region has improved relative to last year.  For the 2013 calendar year, the total number of sales in the region increased 9.3 percent from the 2012 level and the median sale price increased by 9.6 percent.  All jurisdictions in the region had a higher median sales price in 2013 than in 2012.  In December, the region recovered from the slowdown that occurred in November due largely to the shutdown of the Federal Government.  Closed sales increased 9.7 percent from last December and 18.8 percent from last month.  The increase in closed sales from November does not follow typical seasonal patterns as the ten-year average month-over-month change is 5.7 percent.  The increases in closed sales as compared to both last year and last month indicate that the low level of sales in November was anomalous and not part of a larger trend. 

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For the third consecutive month, active listings increased from last year, with gains in all property segments except single-family detached homes.  Even with this increase, supply remains tight and is only 26.8 percent of its 2008 peak level.  New listings increased 4.1 percent from last year which is the ninth consecutive month of increases for this indicator.  The median sale price increased 9.0 percent as compared to December 2012, the 23^rd consecutive month of year-over-year gains.  In the upcoming year, it’s possible that rising interest rates and inventory may flatten some of the price growth.

CLOSED SALES

Most December sales in seven years.  The number of closed sales in the Washington DC Metro Area increased 9.7 percent from last December for a total of 3,664.  This is the highest December-total for sales since 2006.  As compared to last month, the number of sales increased 18.8 percent, which is three times the 10-year average November-to-December change of 5.7 percent.  The number of closed sales increased in all property segments as compared to this time last year.  Condo properties had the sharpest increase, rising 12.9 percent from December 2012.  Townhomes sales and single-family detached home sales increased 10.4 percent and 7.5 percent, respectively.

PRICES

Twenty-third consecutive month of year-over-year gains.  At $391,362, the median sale price in the region is 9.0 percent, or $32,362, higher than this time last year.  This is the highest December-level in six years.  Condos led all property segments in median sales price growth, increasing 11.3 percent from December 2012 for a gain of $30,000.  The median sales price for townhomes in the region increased 10.7, or by $37,000.  The median sales price of single-family detached homes rose 7.4 percent, a gain of $33,000 from December.

The median sales price in Arlington County had the highest growth rate of the jurisdictions, increasing 14.7 percent from December 2012.  Prince George’s County increased by nearly as much, rising 13.9 percent.  Fairfax City was the only jurisdiction to have a year-over-year sales price decline.  For the region as a whole, the median sales price in the 2013 calendar year increased to $399,900 from $365,000 for a 9.6 percent gain from 2012.  All jurisdictions in the region had a higher median sales price in 2013 as compared to 2012.  Among the jurisdictions, Prince George’s County had the highest growth in annual median sales price, increasing 15.9 percent from 2012.

NEW CONTRACTS

Decrease in new contracts for all property segments.  There were 2,881 new contracts signed in December, 7.0 percent, or 216 contracts, fewer than this time last year.  New contracts decreased 25.2 percent from last month, a steeper decline than the ten-year average November to December change of -15.6 percent.  New contracts for single-family detached homes decreased the least, falling 5.0 percent from last December.  New contracts for condo properties decreased 5.9 percent while new contracts for townhomes decreased 11.6 percent.

INVENTORY

Increase in active listings driven by townhome and condo properties; continued increases in new inventory.

Active listings in the DC Metro Area increased 7.4 percent from this time last year to 6,944 listings at the end of December.  This is a gain of 478 listings and the third month of increases for this indicator.  Despite this increase, active listings are 73.2 percent lower than their September 2007 peak.  Single-family detached homes were the only property segment to have fewer listings compared to this time last year, declining 1.5 percent and bringing them to their lowest December-level in nine years.  Active listings for condo properties increased 23.6 percent, or by 343 listings, from this time last year.  There were 1,267 townhome listings, 18.0 percent, or 193 listings, more than last year.  This is the fourth consecutive year-over year increase for both townhomes and condos.    

Gains in new listings have contributed to the increase in active listings.  There were 2,565 new listings in December, which is an increase of 4.1 percent from last year.  This is the ninth consecutive month of growth for this indicator, evidence that sellers are becoming more confident in the market.  Condo properties led all property segments in new listing growth, increasing 15.5 percent from last December.  New listings of single-family detached homes increased 2.7 percent.  New listings for townhomes decreased 5.4 percent from this time last year and were the only property segment to have fewer new listings than last year. 

DAYS ON MARKET

Listings moved quickly.  The median-days-on-market (DOM) for the month remained historically low, at 25 days, and is the lowest December-level since 2005. This marked the 23^rd consecutive month with a lower median DOM than the previous year. 

Half the homes sold in 2013 were on the market for 15 days or less, representing a nearly two-week improvement over the median DOM of 27 days in 2012. Five jurisdictions had a median DOM lower than the regional level for the year – Falls Church (10 days), Fairfax (11 days), Fairfax City (11 days), Arlington (12 days) and Washington, DC (13 days).

ASKING vs. SALES PRICES

Advantage: Seller.  Given the competitive nature of the DC Metro market in 2013, it is not surprising that sellers received a higher percentage of asking prices at contract than in previous years.  The average sales-to-original-list-price ratio was up 2.2 points, from 95.8% in 2012 to 98.0% in 2013.  This was the highest annual level since 2005 for this indicator.

The District led the region with a 98.8% mark, which was 2.4 points higher than its 2012 level. Prince George’s County saw the largest increase, rising from 93.1% in 2012 to 97.6% in 2013. Every Virginia jurisdiction except for Alexandria City exceeded the regional average, while the Maryland counties were all below the regional average.  Every jurisdiction in the region exceeded its 2012 level, a clear indication of a growing seller’s market.

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 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.