Metro DC Housing Market Analysis: 2011 08

Sales Slump; Median Sales Prices Hang On

September 8, 2011

(Washington, DC) – So far this year, sales volume in the metropolitan Washington, DC existing home market is outperforming 2008, when the home sales bottomed out in this region, but cannot seem to build a head of steam.  The region consists of Loudoun, Montgomery and Prince George’s counties; the cities of Manassas, Manassas Park, and Prince William County (PWAR); Arlington and Fairfax counties, the cities of Alexandria, Fairfax, and Falls Church (NVAR); and the District of Columbia.  The table below lists the January through August sales volume for each area for every year since 2006.  Sales in the entire region are about 9 percent behind 2010 (recall though that the market was artificially stimulated during the first half of 2010 by the First Time Buyers Credit) but roughly 3 percent higher than at the end of August 2008.

Since 2006, sales volume in Loudoun County and NVAR have consistently declined, falling in 2011 by 21 percent  and 22 percent respectively behind the January through August volume in 2006.  The highest monthly volume is typically found in NVAR and Montgomery County;  these two areas account for 51 percent of the region’s total sales volume in 2011.  Both have seen volume declines in the last two years, strongly affecting the region totals.


The District and Virginia suburbs seem to be faring better than the Maryland suburbs.  Montgomery County’s January through August sales volume is off by 31 percent compared to 2006 and in Prince George’s County, sales volume has declined 37 percent.  The District has the best record with a decline compared to 2006 of only 17 percent.  The Virginia suburbs’ declines range from 21 percent in Loudoun County compared to sales in 2006 and 27 percent in PWAR.

With the exception of Prince George’s County, the 2011 January through August median sales price beats both the 2009 and 2010 medians at the same time of year everywhere else in the region.  The regional median of $330,000 is $85,000 less than it was at the end of August in 2006 but $20,000 higher than it was two years ago.  The largest percentage increase since last year has been in Loudoun where the year-to-date median is now $380,000.  NVAR leads the region with a median of $418,000 followed in second place by the District with a 2011 median of $399,900.


 It takes longer to sell existing homes this year compared to last throughout the region.  Last year the average days on market was 62 days in metro DC; this year the average is 71 days.  The largest leap was in PWAR where an extra two weeks was added to the expected time to sell this year.  It is interesting that even with the big jump, PWAR still has the lowest average in the region.  Prince George’s County’s average exceeded 100 days four of the last eight months resulting in the highest average in the region.


The year-to-date average close price to original list price ratio in the metro DC area was 94.3 percent (as of August 31st).  Every month this year, the ratio was slightly below the 2010 ratio so the year-to-date average from 2010 is not much different, 94.5 percent.  The highest year-to-date average is in PWAR (96 percent) and the lowest is in Prince George’s County (89.4 percent).

The share of distressed sales so far this year has declined in every area except in Prince George’s County where 63 percent of 2011 sales were either short sales or bank owned properties.  The lowest share is found in the District (14 percent) and it is below 30 percent in Loudoun, Montgomery and NVAR.

Given the disappointing sales in metro DC this year, it is encouraging to see that the monthly sales volume actually increased in August compared to July (albeit by only four units).  With the exception of Loudoun, the component areas followed the usual trend – steady monthly sales volume declines through February of the following year.  Since sales volume was alarmingly low in the second half of 2010 (following the expiration of the First Time Buyers Credit June 30th), it would be nice to see month-over-year increases through the end of 2011.  The District and the northern Virginia suburbs did their part but August sales in Montgomery and Prince George’s fell behind August 2010 totals (-5 and -12 percent respectively).

For more detail, please see Metro DC EH Analysis 2011 08.


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