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 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.
Sellers in the District and NVAR Accepting Better Offers This Year
The graph below compares the 2010 average close price to original list price ratio in the metro DC region and its component jurisdictions to the 2011 year-do-date average through July.
This indicator reflects the willingness of sellers to accept low offers (if the ratio is below 95 percent) and/or the seller’s ability to accurately price their homes to match current market conditions (if the ratio exceeds 95 percent). Note that this analysis uses the original list price rather than the current list price at sale.
Sellers in the District of Columbia and the NVAR area (Arlington and Fairfax counties, Alexandria, Falls Church and Fairfax cities) have seen improvement in their average close price to original list price ratios this year compared to last. Other areas in the region have declining averages this year.
PWAR (Prince William County and the cities of Manassas and Manassas Park) has the highest average 2011 ratio and is the only area that is above 95.9 percent. On the other hand, Prince George’s County has not only seen the largest decrease since 2010 but it is also the only area with an average below 90 percent.
The ratio for the entire region has declined only slightly with considerable help from the improvement in NVAR, which historically has the highest sales volume in the region. The significant decline in Prince George’s County this year, which ranks third in 2011 sales volume behind second place Montgomery County, led the others in pulling the metro DC average down from 94.5 percent last year to 94.2 percent this year.
It Takes Longer to Sell Homes in 2011 Throughout the Metro DC Region
The graph below compares the 2010 average days on market for the metro DC region and its component jurisdictions to the year-to-date average through July in 2011.
In every case, the 2011 average days on market has increased compared to last year:
- Metro DC + 16.9%
- Loudoun + 25.3%
- Montgomery + 17.4%
- NVAR + 17.1%
- Prince George’s + 8.1%
- PWAR + 34.0%
- District of Columbia + 10.4%
PWAR (Prince William County and the cities of Manassas and Manassas Park) has the lowest 2011 average in the region at only 54 days. However, it has also seen the largest increase from 2010 (40 days, +34 percent). Prince George’s County had the smallest jump compared to last year and it’s the only area with less than a 10 percent increase. However, its 2011 year-to-date average days on market far outpaces the average in other areas in metro DC (81 percent higher than PWAR).
Median Sales Prices Reach New Highs
The table below lists the median sales price in July 2011 compared to June 2011 and July 2010. The median sales price in the District of Columbia reached a significant milestone in July. Before July, the median had not reached $445,000 since June 2006 when the market was at the height of the housing boom here in metro DC. Similarly, NVAR (Arlington and Fairfax counties and the cities of Alexandria, Fairfax, and Falls Church) posted its highest median sales price since August of 2007. Montgomery County’s median was at its highest level since August of 2010. The metro DC July median ($355,000), including all the counties and jurisdictions illustrated below, matched the July 2010 median and increased the number of consecutive months the 2011 median met or exceeded the median in the corresponding month in 2010 to three.
Prince George’s County Continues to Struggle
August 9, 2011
(Washington, DC) – Prince George’s County is one of the components of the Metropolitan Washington, DC region (which also includes Montgomery County in Maryland, Arlington, Fairfax, Loudoun, and Prince William counties in Virginia and the cities of Alexandria, Falls Church, Fairfax, Manassas and Manassas Park in Virginia and Washington, DC). Since 2006, Prince George’s has generated 14 percent of the region’s total existing home sales volume. Even though it has always been known as an affordable alternative to the more costly DC suburbs, Prince George’s County is an anomaly in this region; its housing market is in a steep and steady decline.
Consider the fact that the entire metro DC region has suffered a 21 percent decline in its year-to-date median sales price (January through July each year) since 2006. Bad enough, to be sure, but the comparable decline in Prince George’s County is a whopping 50 percent and still falling. While the year-to-date median sales price has seen modest increases throughout the metro area in 2010 and 2011, Prince George’s County has had six consecutive years of median price decreases.
Metro DC Jan-Jul 2006 MSP = $415,000; Metro DC Jan-Jul 2011 MSP = $330,000
PGC Jan-Jul 2006 MSP = $320,000; PGC Jan-Jul 2011 MSP = $160,000
So far this year, the median sales price in Prince George’s County has declined 7 percent whereas the median has increased 18 percent for the entire region and while the metro area had three decreases in the last seven months, Prince George’s has had five.
Metro DC Jan 2011 MSP = $299,900; Jul 2011 = $355,000
PGC Jan 2011 MSP = $171,900; Jul 2011 = $160,000
Compare the July average days on market in the metro DC area of 64 days to the comparable average in Prince George’s County – 104 days. The average across the region declined 19 percent from January to July 2011 while it increased 17 percent in Prince George’s County.
Metro DC Avg Days on Market Jan 2011 = 79 days; Jul 2011 = 64 days
PGC Avg Days on Market Jan 2011 = 89 days; July 2011 = 104 days
Metro DC YTD Avg Days on Market 2011 = 72 days
PGC YTD Avg Days on Market 2011 = 98 days
The year-to-date average close price to original list price ratio in the metro DC area was 94.2 percent (as of July 31st) with five consecutive months above 94 percent. In Prince George’s County, the year-to-date average is 89.3 percent and it’s had five consecutive months below 90 percent.
Another troubling aspect of the Prince George’s County market is its share of distressed sales (short sales and bank-owned properties). The ratio is trending down but it is still strikingly high. Roughly 23 percent of metro DC’s sales in July 2011 were distressed. About 57 percent of Prince George’s sales were distressed in July. Through the end of July, the 2011 average share of distressed sales in the metro area was 32 percent; it was 64 percent in Prince George’s County. Further, for the last two consecutive months the metro DC share was less than 25 percent; it was above 55 percent in Prince George’s County since May 2010.
By contrast, the other component jurisdictions and realtor associations in the metro DC area have all seen year-to-date median sales price increases in 2011 compared to 2010; the 2011 average days on market is below 80 days elsewhere in the region; the 2011 average close price to original list price ratio exceeds 93 percent everywhere but Prince George’s County; and the 2011 average share of distressed sales exclusive of Prince George’s ranges from 15 percent in the District of Columbia to 43 percent in the Prince William realtor association (PWAR).
For more detail, please see Metro Dc Housing Analysis 2011 07