One way to measure the competitiveness of the real estate market is to compare inventory and sales. That is the supply versus demand approach, and it is very helpful. This approach tells us that we are in a profound buyer’s market today.
However, when you compare different jurisdictions, you quickly find that some markets are doing better than others. The differences show up in an inventory versus sales analysis, but today’s chart presents another way of comparing jurisdictions.
Click here to see this week’s chart.
Let’s start with the region’s most competitive market: Arlington County. According to U.S. Census data, there were 93,675 housing units in Arlington in 2006.
At the end of March 2008, 986 homes were on the market — a little more than 1 percent of the total housing inventory. The District also came in a little over 1 percent, and the city of Alexandria was a little higher still.
These three jurisdictions, which lie completely within the Beltway, had the lowest percentage of housing inventory on the market in March.
Nearby, the jurisdictions that lie close to the Beltway had a bit more housing stock on the market.
Farther out, the percentage quickly climbs above 2 percent in Maryland and more than 3 percent in many Virginia counties.
Prince William County, which has been flooded with home listings recently, had for-sale signs in front of more than 5 percent of homes at the end of March.
Interestingly, when looking at the data this way, you realize that home builders have a dilemma. New homes would be most in demand inside the Beltway, where homes sell more readily than in jurisdictions farther away.
However, all the available land lies farther away. The only places you can build large subdivisions are well outside the Beltway, where land is less developed and less expensive. However, with existing homes selling relatively slowly out there, builders are also having a harder time moving their products these days.
— Chris Sicks
Contact Chris Sicks by e-mail (csicks@gmail.com).
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