THE EVERS & CO. REAL ESTATE REPORT
The market this fall continues to be strong, and at the end of 10 months, the dollar volume of sales was as high as it was for all of 2012. With that said, sales volume is still only at 60% of what it was the peak of the market in 2005. Despite predictions to the contrary, the recent government furlough didn’t have a significant effect on the area marketplace, probably because it didn’t last very long.
The good news for sellers is that the continuing shortage has pushed prices up and they are now within 96% of what they were at the peak of the market. The combination of buyer enthusiasm and shortage of product may encourage more sellers to enter the market and eventually help to end the shortage of product which has been a dominant feature in the market for the past three years. However, the present balance of more buyers than sellers in the close-in Metro area marketplace will certainly continue through the winter and into the spring.
Our steadily improving market was once again reflected in the September 2013 numbers, which showed a 7% increase in dollar volume of sales and a 31% decrease in days on the market. The 9% increase in average price was surprisingly high for September and supports our earlier prediction that we would have an unusually strong fall market this year, because of the continuing low inventory and increasing buyer demand.
Even though inventory is tight, buyers should know that if they can find a property they want to purchase, buying now will be cheaper than waiting for spring, when prices are sure to be higher if we continue the current upward trend. Equally as important, the cost of mortgage money will be higher because of the anticipated increase in interest rates. For those two reasons, buying now would be a smart course of action.
Sellers will do well, now and in the spring, to price their properties according to the most recent similar “sold” properties, which will put them is a position to get the strongest response from buyers.
The August numbers support a strengthening market with dollar volume of sales up 26%, prices up 6.4%, and days on the market down 33% compared to last August.
Consumer confidence continues to grow, and with more buyers and the relatively low number of listings, prices are on the rise. As it is, we live in one of the most expensive Metro areas in the country; the median price of single family homes nationwide is $214,000 and in our area it is $600,000! Nevertheless, there are many buyers for this expensive real estate and we are used to having competing bids on well-priced homes, sometimes even for those priced at $1,000,000 and above.
Even with the new homes that are currently being built, we still expect a shortage of product for the rest of this year and next spring. And, if interest rates stay in the ranges where they have been for the past four years, we can fully expect this robust market to continue.
The numbers for July were as strong as June in the close-in Metro area, with a big 32% increase in dollar volume of sales over July of last year, a 7.6% increase in average price and a 40% decline in days on the market, showing that properties continue to sell much faster than last year.
The same factors that have driven the market all year are still in place, with increasing buyer demand and a shortage of product which puts upward pressure on prices. However, July is usually a much slower month than June, so the fact that the two months are on a par shows the increasing strength of this robust real estate market.
We experienced the highest year-over-year rise in average price so far this year in the month of June, with a 9.2% increase over last year at this time. In addition, days-on-the market were down a whole 41% from last June. The dollar volume of sales was up an encouraging 24%, which should help boost sales, since the shortage of listings has hampered sales in general. Buyer demand is still strong despite the recent rise in interest rates, and we are finally seeing more product in all price ranges on the market.
We are still looking at the same factors for success: properties that are priced correctly and show well are selling quickly, and often, with multiple bids. Unless mortgage interest rates continue to rise this fall, we expect this market to continue right through to next spring.
The May housing market saw steady growth and continuing strength in the close-in Metro area during this traditionally busy month. Dollar volume of sales was up 23.8% over last May, the average sales price was up 4.8%, and the number of days on the market was down 28.6 %.
With very low inventory and increasing buyer demand, housing prices continue to rise each month. The “shadow inventory” of distressed and foreclosed properties that many forecasters predicted would hit the market last year and this year never occurred, and it will take some time for new construction to feed more product into the marketplace. If interest rates remain relatively low, we can expect these current market conditions to continue for the foreseeable future.
The real estate market in the close-in Metro area continues to move at a robust pace with dollar volume of sales up 21% over last April and average sales price up 6%. The number of days on the market was down a significant 35% compared to last April as more buyers enter this very competitive DC area marketplace.
The biggest news to come out this month in the greater Metro market is the incredibly low 1.9 months supply of inventory! To get some perspective, a 6-month supply is considered normal in many parts of the country. This acute shortage is likely to continue throughout 2013, because even though more sellers are entering the market, they are greatly outnumbered by enthusiastic buyers, who have renewed confidence in the housing market and who want to take advantage of the record low interest rates and the variety of favorable mortgages available.
The big news for March in the close-in Metro marketplace was the surge in dollar volume of sales to 21% over March 2012, and 46% over what it was last month! This is good news because we have been experiencing a great increase in buyer demand and not nearly enough supply to satisfy that demand. The reality of a strong real estate market has finally influenced homeowners to make their move now, and renovators and builders who have recently re-entered the market will soon be adding to the supply of homes for sale.
The other encouraging data that will spur would-be sellers to act is this past month’s 8.5% rise in price over last March. However, even with the increase in listings and sales, the inventory has been so historically low that we will still be experiencing a relatively tight supply for the next several months.
The numbers from February for the close-in Metro area marketplace were identical to January 2013, with the dollar volume of sales up 9.7%, the average price up 5% and the days on the market down 22%. Although we are seeing an increase in sales, the inventory is still much lower than demand, so what has become a seller’s market will continue throughout the spring.
Buyers have to think competitively, and they should know that it is probably better to buy now than to wait until June. If sellers price their properties correctly, they will sell quickly, and they can expect to see multiple bids on well-priced properties between $300,000 and $800,000 in the hot “walkable” neighborhoods. So, we are on course for a busy spring market with low supply, increasing demand and rising prices.
The data from January 2013 indicates that the spring market is already in full swing. The dollar volume of sales for the close-in Metro area is up 9.74% over last January, and the average price is up 5% from last year at this time. The days-on-the-market is down 21.77% from last January.
This means that more property is selling faster and at higher prices than last January, which is no surprise to real estate agents who are currently working with buyers and sellers. Increasingly, buyers are faced with a highly competitive marketplace, where reasonably-priced properties have more than one bidder. And, sellers are in a position to be selective and require higher prices and cleaner contracts with fewer contingencies.
As we mentioned last month, with the combination of the current low inventory and strong buyer demand due to historic low interest rates and increasing consumer confidence, the spring market will continue to grow in favor of sellers.
December numbers were strong, with dollar volume of sales 15.6% higher and average price 12% higher than December 2011. Tracking the market from it’s highest point in 2005 to its low point in 2008 and then comparing it to 2012, we can see that prices in the close-in Metro market are within 3% of what they were at the peak of the market, but dollar volume of sales, which fell in 2008 to 55% of the market’s peak, is still only 61% of the volume reached in 2005.
The combination of low supply, high demand and record-low mortgage interest rates have made prices climb rapidly in the past few years. This means that the spring market will be very competitive for buyers, and many listings will draw multiple offers. This year we can expect to see a noticeable rise in prices even between January and June, so buyers will do well to get into this market as early in the spring as possible. Sellers will do best by preparing their properties to show well and pricing them competitively.
The most newsworthy feature about the market in the close-in Washington Metro area is the big shortage in inventory. We haven’t had this little inventory since the peak of the market in 2005, when everything was being snapped up as soon as it hit the market.
The current shortage is because we have had almost no new construction for the past seven years and up until this year, many people were staying in place rather than moving. But, this past month alone we saw a 21% increase in dollar volume of sales over last November and a 5.5% increase in average price. More properties are coming on the market and when they do, they are selling. Low inventory always puts pressure on price, and we are seeing prices steadily rising.
Advice to buyers: now is the time to buy, before prices go up significantly and while we still have interest rates below 4%. Advice to sellers: You may be pleasantly surprised as to what you can get for your property. Buyers and sellers, call your favorite real estate agent today. Now is the time to make a move.
The Washington Metro area marketplace remains strong this fall, with a 28% increase in dollar volume of sales over October 2011. The area market also saw a 6% increase in the average home price and the average “days on the market” dropped by 30% compared to last October. This is a clean sweep of good numbers for the three major indictors we watch and report on each month.
Consumer confidence is also much stronger, evidenced by a genuine surge in the number of builders and renovators searching for lots and houses to renovate. The search for lots and tear-downs is running strong in both Montgomery County and Fairfax County, and contractors are combing through D.C. neighborhoods to find viable projects where they can buy townhouses to renovate and sell, or buy small rental buildings to renovate and convert to condominiums. This aspect of the market is expected to grow as we move into spring 2013.
We are looking at a continuation of a genuine recovery, with some of the strongest numbers we’ve seen all year, led by a 14% increase in dollar volume of sales over September 2011, in the close-in Metro area. Average price was up a full 5% and days on the market down 18.5%. Contrary to earlier fears about a shadow inventory as a result of foreclosures emerging and slowing the market, the Washington Metro marketplace continues to see just the opposite- low inventory which is pushing prices up.
Across the country, the shadow inventory dropped 10% in July 2012, compared to July 2011. For the 11th month in a row, Fannie Mae surveys show that Americans are positive about the housing market and expect prices to go up.
Evers & Co. Real Estate President Says Tremendous Shortage of Properties for Sale is Fueling Competitive Buying Situations and Rising Prices in the Washington D.C. Metro Area Market
Washington, D.C. – The residential real estate market remained strong through the end of the summer in the close-in Washington, D.C. area, with home sales numbers up 6.4% in August compared to August 2011 and days on the market down 20%. While August sales contracts rose to their highest levels in three years, the dollar volume of sales was down 57% from the peak of the housing market in 2005 which reflects the very low inventory of properties for sale.
“We are seeing a tremendous shortage of inventory, which is something a lot of people didn’t foresee at all at this time in the housing market,” says Donna Evers, Evers & Co. Real Estate President and Broker. “This incredible shortage in product results in pushing prices upward and creating competitive, multiple bidding situations for buyers in popular Washington, D.C. metropolitan area neighborhoods.”
For properties owners who are considering listing their property in this sellers’ market, the process can be done fairly quickly says Evers. Homes that do not require updating can be listed within as little as a week and for properties requiring minor updating or renovations, they usually can be listed within a month. Evers also noted that properties that show well and are priced correctly in sought-after locations in Washington, D.C., Northern Virginia and Montgomery County, Md. are regularly receiving multiple offers.
Evers reiterates this is still a great time for buyers with the continuing record-low interest rates that dramatically affect the overall cost of home loans.
“For most buyers, eighty percent of what you buy when purchasing a property is borrowed money, which is most of the purchase price, and has to be a very big factor when you are contemplating whether or not you want to buy now,” says Evers. “While sales prices are starting to rise, they haven’t risen to their zenith and with such low rates, now is the time to buy and people shouldn’t wait.”
* Statistics are taken from the Metropolitan Regional Information System for three areas: Washington, D.C.; Montgomery County in Maryland; and Fairfax County, Arlington, Alexandria and Falls Church in Virginia.
The housing market throughout the country is in recovery, with the close-in Washington Metro area marketplace leading the most successful metropolitan markets with a 7.4% increase in dollar volume of sales over last July and a 20% decrease in days on the market.
While prices didn’t go up much in July, they had risen in the greater Metro area this spring to within 80% of the peak bubble prices. There is a continuing shortage of product, since very few new homes were built over the past six years and some sellers are still keeping their homes off the market, waiting for prices to get closer to what they were in 2005. This is creating situations with multiple bids on popular properties. With limited product, an expanding local labor market, high prices on rentals and record low interest rates, we can expect that this the Washington area marketplace will only continue to improve.
The close-in Metro market is continuing to trend upward, with a 5% increase in dollar volume of sales over June of last year, prices up 1%, and days on the market down 3%. With record low interest rates and national statistics showing a continuing improvement in the housing market, buyer confidence is back, especially in our Metro area which is one of the strongest real estate markets in the country.
Low inventory, due to very limited new construction and reluctance of potential sellers to put their property on the market, is creating an increasingly competitive market for buyers, resulting in multiple offers for properties that are well priced, show well and are located in the popular areas of NW Washington, Arlington and close-in Montgomery County.
These trends are expected to continue through the summer and fall, and an increase in inventory would be positive for the market given the number of interested buyers in the D.C. Metro area and the enthusiasm in the marketplace.
The May market in the close-in Metro area was strong, with the edge on market control continuing to shift from buyers to sellers. The area averages showed an impressive 25% increase in dollar volume of sales, a 7. 5% increase in average price and a 22 day reduction in “Days on the Market”. The biggest increase in price occurred in the District with a 13.8% rise in average price over May of 2011.
The market across the country continues to improve according to the National Association of Realtors, with the most current nationwide statistics showing that home sales rose 10% from April 2011 to April 2012. The greater Washington Metro area is one of the most successful markets in the country, and prices here are continuing to rise because of the shortage in product and ever-increasing buyer demand.
* Statistics are taken from the Metropolitan Regional Information System for three areas: Washington, D.C., Montgomery County, Maryland; and Fairfax County, Arlington and Alexandria in Virginia.
In the close-in Metro area, the spring real estate market started in March. While there was almost no change in either the dollar volume of sales or the average price from March of last year, there was a dramatic change in both numbers in just one month, between February and March of this year. The area averaged an impressive 43.6% increase in dollar volume of sales and a 8.6% change in average price, with Montgomery County leading the way with a 61% rise in dollar volume of sales and an 11.5% increase in average price.
The Metro area marketplace has been steadily advancing in recovery from the bottom of the market in late 2008 and early 2009, and since there has been little or no construction and sellers have been reluctant to enter the market, there is a shortage in properties that show well and are well-priced, contributing to the growing frequency of multiple bids on both condos and houses, especially in the $300,000-$1,000,000 range. This shortage will probably continue through the spring and summer which, in turn, could drive prices higher at a faster rate.
February showed a marked improvement in the close-in Metro area, compared to January, when the numbers were almost the same as the previous year. The dollar volume of sales was up 9% from last February, average price was up 4.3% and days-on-the- market (DOM) was down 3.3%. Once again, the big leader in our area was the District, with a huge 21% increase in dollar volume of sales, an 8% increase in average price and a noticeable 20 day decrease in DOM.
The attraction for first-time homebuyers and empty-nesters of living in “walkable” neighborhoods contributes to the success of the District. Added to that is the fact that much of Washington has many neighborhoods of comfortable homes and condominiums on attractive tree-lined streets, near Metro stops and just minutes from the heart of downtown, which is unusual for most big cities in the US.
The January average sales statistics for the close-in Metro area were almost flat compared with last January, but a closer look shows that the numbers were lower in Montgomery County and suburban Northern Virginia and much higher in the District. While dollar volume of sales was down 9% in Montgomery County and 4% in Fairfax, Alexandria and Arlington, it was up 8.5% in the District. For the average price of a home, Montgomery County was down 4.7%, close-in Virginia was up 1.3% and the District was up over 10%.
The District has often led the other jurisdictions in sales since the slowdown in 2006, and the subsequent recovery of the past three years. In addition to having the reputation for job stability and prosperity, Washington, D.C. has enjoyed good press about the growth of the downtown commercial and residential real estate markets.
The December dollar volume of sales in the close-in Metro area was down 11.3%, year over year, but an improvement from November with -13.72%, and October with -22.8%. The average price, which also dropped into negative numbers this fall, is improving with the December average being only -4.2% lower from last year at this time. The fall real estate market deteriorated along with the stock market and is now getting better as the stock market and consumer confidence improve.
These numbers should continue to pick up as we move into spring, largely because we are looking at a shortage of inventory that will probably last for several months. With very little construction going on for that last six years, interest rates remaining low, and consumer confidence building, we can expect a very competitive marketplace in the “hottest areas”-NW Washington, close-in Bethesda/ Chevy Chase and Arlington- for properties that are priced correctly and show well.
November was the second month in a row where the average price in the close-in Metro area market was down slightly, after 16 consecutive months of the price being up over the same month of the previous year. So, while our numbers are significantly better than the rest of the country and we can chart the bottom of our local housing recession as having occurred late 2008 and early 2009, we are still moving uphill slowly.
What does this mean for buyers and sellers?
Buyers can see that we are well past the bottom of the market, and interest rates continue to be at record lows, so now would be the best time to buy before prices go up. While buyers may need a 20% down payment for the conventional market, FHA loans can still be had up to $729,750 with only 3.5% down payment, another good reason to buy now.
For sellers, it means that we have the healthiest market in the country, so you can get your property sold if you price it according to other recent sold comparables and take the time to make sure it shows well and outshines the competition.
With low inventory in much of the close-in Metro area, and interest rates at their all-time low, we should be poised for a strong market this spring.