- The Washington Times - Wednesday, December 22, 2004

It’s deja vu all over again. Unexpectedly, almost unbelievably, November suddenly made the Washington area feel like spring again.

I’m not talking about meteorology but buyer psychology. Last month was one of the most competitive months the Washington region has ever seen, with a shortage of available homes reminiscent of a busy spring weekend.

Vying for this limited supply of properties was a horde of eager buyers, undaunted by the prospect of purchasing a home during what is normally the second-slowest month of the year.

The ratio of supply to demand was so out of whack last month that sales chances nearly reached 100 percent. Five area jurisdictions actually exceeded 100 percent: Prince George’s, Montgomery, Arlington, Alexandria and Fairfax.

Sales chances are calculated by dividing home sales by inventory. So for sales chances to go above 100, there would have to be more homes sold than homes listed.

How could this be? Because inventory fluctuates daily, the inventory figures I report are based on the number of homes for sale on the last day of the month. They are a snapshot, really, a useful snapshot that tells buyers how many homes they can expect to find on the market on a given day. Home-sales figures, however, are cumulative for the month.

Ten years ago, homes sat on the market for months before being sold.

Today, however, homes are selling in only a few days. Because of this, my inventory snapshots taken on Oct. 31 and Nov. 30 missed a large number of homes — homes that went on the market and sold quickly.

For example, a home placed on the market in Prince George’s County on Nov. 5 probably was sold by Nov. 25. That adds one to my monthly sales figure but zero to my inventory figure.

Such competition among buyers at the end of the year indicates that 2005 will bring more of the same.

This also means that home prices could rise by a double digit percentage yet again, making area homes even more ridiculously expensive, yet easy to sell.

Contact Chris Sicks by e-mail (csicks@gmail.com). The statistics in this story reflect a metropolitan area of 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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