Is this really the middle of winter? With unusually warm January temperatures, it’s hard to believe that before this season is over we may actually need those snow boots that are currently collecting dust in the closet. As the weather warms, buyers are warming again to the idea of looking and maybe buying homes. The real estate cycle has repeated this pattern many times. The true “spring market” actually begins in January with a spike of buyer activity, followed by a lull in February that leads to an uptick in sales by March. This January has been no exception. With banks lending at exceptionally, indeed historically, low interest rates buyers know that now is a great time to invest — as long as the price is “right”.
Looking at the trends from the last few years, the real estate market in 22309 cooled in 2011 after two years of steady, more stable activity. Prices fell, overall volume fell and the ratio of list to sold prices fell. For example, if a seller had his house listed at $500,000 but received $470,000, the sold to list ratio would be 94%. December saw the first increase in sales activity in 4 months - even though it was lower than the previous December. Are December’s numbers a harbinger for what's to come in 2012?
Taking a closer look at the data, sales of four or more bedroom, detached homes led December’s sales. Two-thirds of these single family homes sold were in the $200,000-$599,000 price range, showing that homes in the lower ranges are still in relatively high demand.
In a positive development, both average and median sold prices increased in December from last month and last year. The average sold price rose to $365,364, a nearly 23% increase over last year, and the median price increased to $302,000, 13.5% above December of 2010. Breaking that down between detached and attached homes, the average attached home price rose to $187,919 and detached to $496,130.
Also, more conventional loans were used to finance sales than other types of loans. With all of this sales activity, the housing inventory in 22309 has declined to about two and three-quarter months’ supply, which would normally translate into a sellers’ market. However, the buyers remain in the driver’s seat. Many sellers are waiting to sell until the market improves. There were almost 10% fewer new listings and 29% fewer active listings this past December compared to the same month in 2010.
Are buyers finding what they like? It doesn’t seem so. Overall, there were fewer contracts in December compared to the previous three Decembers, which shows slower buyer activity but also reflects the low inventory. Many buyers have been looking for months and haven’t seen that “perfect house” yet. Buyers will likely have more choice when the spring months roll in and more homes are listed for sale. Some buyers are taking advantage of the recent dip in prices to “dig in” and take on the challenge of a “fixer upper,” but many are reluctant to do so.
I suspect Old Man Winter will creep back up on us in February before the spring thaw. Perhaps, the market in our neck of the woods will be reborn as well. Sellers and buyers will hopefully fertilize the spring market resulting in blooming and booming housing sales.
Property Sales in 22309: December property sales were 35, down -14.6% from 41 in December of 2010 and 59.1% higher than the 22 sales last month. December 2011 sales were at their lowest level compared to December of 2010 and 2009. December YTD sales of 396 are running -23.3% behind last year's year-to-date sales of 516.