March Signed Contracts Jump 34.3% Over February; Median Sales Price Rises 3.2% Year‐Over‐Year
Rockville, MD – (April 11, 2011) – The following analysis of the Washington, D.C. Metro Area housing market has been prepared by housing market expert Jonathan Miller, based on the March 2011 RBI Pending Home Sales Index™ released today:
Pending home sales jumped 34.3% month‐over‐month as the Washington, DC metro area entered the “spring market” with 5,432 signed contracts, the highest number for the month of March since 2006. The March total exceeded the federal homebuyers tax credit‐fueled total reached in the same month last year. With three consecutive months of increased pending sales activity, median sales price showed a seasonal increase of 6.7%, the first month‐over‐month increase since last October.
Median sales price increased for first time since October, consistent with seasonal expectations. This price metric is based on closed sales and showed its first increase in 2011, consistent with the first increase in pending sales activity three months ago, a two‐month difference between contract date and closing date of a typical sale. The March median sales price was $320,000, the same amount in the same month two years ago.
New inventory jumped to 49.5% of all active inventory in March as sellers enter the “spring market”. In March and April of 2010, new inventory exceeded 50% of active inventory as sellers rushed to meet the surging demand of buyers taking advantage of the federal homebuyers’ tax credit. Aside from last year’s unusual period of tax stimulus, new listings as a percentage of active listings reached 49.5% ‐‐ the highest in four years. Since active inventory is 0.4% below last year’s total, the inventory mix is shifting to newer listings as older inventory was sold off.
Days on market expanded by 13 days as older inventory was more readily absorbed. There was a 13 day increase to 83 days on market—the number of days between original list date and contract date - compared to 70 days on market in the same month last year. The 50.8% month‐over‐month surge in new listings and modest decrease in active listings reflects the improved absorption of older listings, driving the days on market metric higher. Listing discount—the percent difference between original list price and sales price—edged up nominally to 6.2% from 5.9% over the same period as active inventory slipped.
The monthly absorption rate edged lower as buyers signed contracts faster than sellers entered the market. The monthly absorption rate—the number of months to sell all active inventory at the current pace of pending sales— fell slightly to 2.6 months from 2.7 months in the same period last year. The March rate is half the rate as the 5.2‐month average absorption rate of the last five years as the market trends toward improved efficiency.
Pending home sales surge to highest level in four years as effects of tax credit expiration end. There were 5,432 contracts signed in March, a 34.3% month‐over‐month jump to the second highest total since May of 2006 which had a total of 5,457. The highest subsequent total number of contracts signed in a month was 6,150 reached last April during the last month of the federal homebuyers’ tax credit program designed to jump‐start the housing market, and ultimately the economy. The expiration of the credit led to depressed sales activity for the balance of 2010 since many buyers in early 2010 were “poached” from the second half of that year.
The RBI Pending Home Sales Index™ is a two‐year moving window on the housing market using pending sales and median sold price. It provides unique insight into the state of the current housing market by measuring the number of pending sales through the most recent month. The results include pending sales through and including March 2011. The market area includes: Washington, DC, Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City.
ABOUT JONATHAN MILLER:
Miller is President and CEO of Miller Samuel Inc., a leading real estate appraisal and consulting firm. A wellregarded real estate commentator, who appears in national publications including the Wall Street Journal and the NY Times covering national and regional housing issues, he has been named “Best Online Real Estate Expert" by Money Magazine. Miller’s stringent focus on neutrality has contributed to his position as one of the top 25 most influential real estate bloggers in the U.S. Follow him on Twitter @jonathanmiller.
RealEstate Business Intelligence, LLC (RBI) is a wholly owned subsidiary of MRIS. 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 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 Multiple Listing Service (MLS).