Washington, DC Metro Area – Most Contracts Signed In May Since 2005

May Pending Sales Show Seasonal 6.5% Rise From April;  43.1% Year-Over-Year Surge Reflects Last Year’s Lull After Tax Credit Deadline. Median Sales Price Rises 5.9% To Last Summer’s Levels

Rockville, MD –(June 10, 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 May 2011 RBI Pending Home Sales Index^™ released today:

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OVERVIEW

There were 5,506 new purchase contracts signed in May 2011, 6.5% more than the 5,170 total in the prior month and 43.1% more than the 3,849 total during the same month last year.  However, the year-over-year jump in new pending sales overstates the consistent improvement in the Washington, D.C. metro area housing market.  In May of 2010 the contract signing deadline for the federal homebuyers tax credit had just expired and pending sales had fallen sharply because they had been “stimulated” to higher levels in the preceding months.  Median sales price continues to show seasonal stability, rising 5.9% in May 2011 to $353,606 – 5.9% higher than April 2011 and 3.5% higher than May 2010.

KEY TRENDS

• May 2011 has most signed contracts for May since 2005. There were 5,506 new purchase contracts signed in May 2011, the most for the month of May since 2005.  New pending sales increased 6.5% over April’s 5,170 total and 43.1% above the 3,849 total of the same month last year.  The year-over-year jump reflected the 37.4% April 2010 to May 2010 drop in pending sales as the April 30^th contract signing deadline for last year’s federal homebuyer tax credit passed.  Pending home sales have jumped 72.3% since the end of 2010, consistent with the 76.4% increase over the same period during the past decade.

• Median sales price reflected seasonal gains, edging higher for the third consecutive month.  Median sales price for May 2011 was $353,606, 5.9% above $334,000 in the prior month and 3.5% above $341,750 in the same month last year.  Based on closed sales, this metric has risen for three consecutive months, consistent with seasonal patterns and returning to levels seen last summer.

• New listings entering the market slipped, yet active listings remained stable.   There were 15,550 active listings in the Washington, D.C. metro area in May 2011, essentially unchanged from the 15,542 total in April and 2.4% less than the 15,939 total in the same period last year.  The year-over-year decline reflected the surge in active inventory in the beginning of 2010 as property owners looked to take advantage of the additional demand created by the federal homebuyers tax credit.  Consistent with market feedback about declining supply, new inventory entering the market declined over the past month despite the increase in demand.  There were 6,524 new listings in May 2011, down 10.6% from 7,300 new listings in April 2011.

• Properties were on the market for the fewest number of days in 7 months.   The average days on market in May 2011 for a closed sale was 68 days, 10 days faster than April 2011 but two weeks slower than the same month last year which was related to the tax credit stimulated market conditions in early 2010.  Days on market is defined as the average number of days from original list date to contract date for all properties that closed during the month.

• Properties continue to be absorbed at a faster rate.  The combination of the increase in new pending sales and the stabilization of active inventory continued to trend the absorption rate lower.   The monthly absorption rate—the number of months to sell all active inventory at the current pace of new pending sales— slipped to 2.8 months from 3 months in the prior month and 4.1 months in the same period last year and consistent with the 10-year 2.9 month average rate.

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 May 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.

ABOUT JONATHAN MILLER/MILLER SAMUEL:

Miller is President and CEO of Miller Samuel Inc., a nationally-known real estate appraisal and consulting firm. A well-regarded real estate commentator, who frequently appears in national media outlets including the Wall Street Journal, the New York Times, Bloomberg News and others covering national and regional housing issues.  He has been named “Best Online Real Estate Expert" by Money Magazine and his stringent focus on neutrality has contributed to his recognition by Inman News as one of the most influential real estate bloggers in the U.S.  More information on Mr. Miller and Miller Samuel can be found at www.millersamuel.com or follow him on Twitter @jonathanmiller.

ABOUT RBI

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).  Visit RBIntel.com or follow @RBIntel on Twitter to learn more.