Last year’s real estate market ended quietly, without any real surprises or changes from the months prior.
Only 3,744 existing homes were sold last month in the Washington metropolitan area. That’s a decrease of 36 percent compared to December 2006, and less than half of the total for December 2004.
Looking at the data for the entire year, sales in 2007 were 21 percent lower than in 2006. The most severe drops in sales activity came at the end of the year, which is why the annual figure looks better than December’s.
Sales in the first quarter were down 18 percent, while fourth-quarter sales were 30 percent lower than in 2006.
See this week’s chart (pdf)
Total sales for 2007 were nearly 75,000. That is significantly lower than the nearly 130,000 sold in 2004, but that was the peak of the seller’s market.
Looking back to buyer’s market of the 1990s, annual sales got as low as 46,000. That was in 1995, the slowest year of that buyer’s market cycle.
Will our sales eventually fall all the way down to 46,000?
No, I don’t think that’s likely, if it’s even possible. That’s because so many new homes have been added to the region. More than 250,000 new homes have been sold in the region since 1995. Of course, some older homes were torn down to make room for the new ones, but not a quarter million.
My point is this: The supply of housing in our region has grown dramatically in the past 12 years. So much so that last year’s 75,000 sales probably represent a roughly equivalent market as that of 1995 when only 46,000 homes sold.
Could sales fall below 75,000 this year? Sure, but they are also going to start rising sometime. The region’s strong economy and low unemployment mean that housing demand will rebound eventually.
— Chris Sicks
Contact Chris Sicks by e-mail (csicks@gmail.com).
The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.
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