Two recent stories from USA Today caught our attention regarding the housing industry - both locally and on a national level.
Mortgage rates hit new record low:
Housing starts rise to four year high for October:
Friday, November 16, 2012
The inventory of homes for sale continues to fall, which is playing a role in the price gains. Active listings are nearly half of their level 2 years ago, and new listings for October are at their lowest point in over a decade.
Demand appears to be persisting across all property segments with the highest October sales in 3 years. There were 3,269 sales in October in the Washington DC Metro Area, a 16.1 percent jump from last October. Sales are steady from last month, up a modest 0.4 percent, which indicates demand could be enduring into the historically slow fall season. The 10-year average change in sales from September to October last month is -3.8 percent.
Median price gains continue for most of the region with the highest year-over-year increase for the DC Metro Area in nearly 7 years. At $362,500, the median home price in the DC Metro Area is 13.3 percent higher than in October 2011. This represents the highest year-over-year increase for any month since December 2005. The low inventory of homes for sale coupled with steady demand continues to push prices upward relative to last year. Prince George’s County leads the way with 20.0 percent growth, an increase of $30,000 to the median price from this time last year. All other jurisdictions within the DC Metro region experienced median price gains with the exception of Falls Church City, however medians there tend to be volatile due to the low quantity of homes sold.
New contracts are at the highest October level in seven years as townhomes lead the growth. There were 4,459 new contracts signed in October in the region, up 5.8 percent from this time last year, and the highest October total in 7 years. Townhomes led all property segments in new contract growth for the first time in over a year, up 11.4 percent from October 2011, followed by condos, which rose 8.9 percent.
Active listings are roughly half of what they were in October 2010 and new listings for October are the lowest in over a decade. There were 8,766 active listings in the Washington DC Metro Area at the end of October, 37.2 percent lower than this time last year. This is the first time the number of active listings has dropped below 9,000 since July 2005. October active listings in the region are nearly half of what they were 2 years ago, indicating dramatic property absorption in the market. All property segments experienced year-over-year inventory reductions exceeding 40 percent. The 4,588 new listings in the region are the lowest October-level since 1999, an indication of a persisting pattern of low supply. The low inventory of homes for sale is having a direct impact on the median days-on-market, which was 23 days in October, down 21 days from this time last year. Impacts can also be observed with the sale-to-list price ratio, which rose from 93.4 percent in October 2011 to 96.0 percent this month for the metro area.