Thursday, January 26, 2012

Market Update


From an increase in signed contracts to the lowest inventory levels in six years, December highlighted a variety of real estate news for the Metro D.C. area. Here are some of the key trends from last month:

December contracts consistent with seasonal patterns. There were 3,250 contracts signed in December, 14% less than the previous month, but right on pace with the 10-year December average of 3,254. The 10-year average decline in new contracts from November to December is 15.8%. New pending sales were 1.7% higher than December 2010.

Lowest active inventory since August 2005, foreclosures down sharply. The D.C. Metro Area market ended 2011 with the lowest inventory level since August 2005 with only 10,684 active listings. This represents a 22.5% decline from December 2010 levels. Only 1 in 20 (5.6%) active listings are under foreclosure, a significant decrease from the 11.2% foreclosed market share in December 2010. Short sales, on the other hand, make up 22.9% of the market at the end of 2011, effectively unchanged from the 22.8% market share for short sales in December 2010. The 327 new foreclosure listings entering the market in December was 58.5% lower than the same period last year.


Stability in pricing to close 2011. The $325,000 median sales price in December 2011 represents a nominal 3% decrease month-over-month and a decline of 3.7% from  December 2010. For further perspective the December 2011 level is 1.6% higher than the $320,000 median sales price of December 2009. With a relative shortage in inventory compared to demand - the market has 3.2 months’ supply of inventory to end the year -  it is expected that upward pressure on prices will continue in 2012.

Increase in closed sales consistent with seasonal patterns; spike in closed short sales. There were 3,169 closed sales in December 2011, an 8.3% increase from the November 2011 level, consistent with seasonal patterns (the 10-year average month-over-month increase for December is 8.9%). The 401 foreclosed sales in December 2011 represented a month-over-month increase of 15.2%, but a decline of 42.4% from the 696 level of December 2010. The 461 closed short sales, on the other hand, represented a 22.0% increase over the 378 closings in December 2010.


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