- The Washington Times - Thursday, August 4, 2005

This has been one busy year for home sellers. In the first six months of 2005, nearly 80,000 existing homes were placed on the market in the Washington metropolitan area. In that time, 68,000 homes were sold.

Almost 51,000 homes were put up for sale in the second quarter alone. Apparently, the lure of big profits is driving many area homeowners to sell this year.

Overall, it was a busy, and somewhat strange, six months for the area market. It began with the most-competitive January ever seen.

Due to a severe shortage of homes for sale, and strong buyer demand, sales chances in January were an incredible 113 percent — the highest figure for any month on record.

Sales chances are the measurement I use to express supply and demand. Sales chances are a measure of market activity, calculated by dividing home sales by inventory. In the adjacent charts, you can compare the chances for this year with prior years, as well as compare the region’s primary jurisdictions with one another.

By June, sales chances had fallen. June was the reverse of January. A surge in the number of home listings and a modest decline in sales meant that sales chances were “only” 74 in June.

I say “only” because 74 still indicates an incredibly strong seller’s market. In the 1990s, I never dreamed chances could get that high. Nowadays, 74 seems rather low.

The market has been so competitive among buyers that prices have risen dramatically this year. Although monthly price data is not entirely reliable, it seems that prices have already risen by double digits throughout the metropolitan area.

The median price for a home sold in Fairfax County in January was $408,500. In June, that figure was $500,500 — an increase of $92,000 in only six months.

Prices rose fastest in Stafford County. This once-rural county has become popular among people who can’t afford the homes in Alexandria, Arlington and Fairfax. As a result of Stafford’s popularity, prices there shot up 25 percent in the first half of the year, from $320,000 to $400,000.

The high inventory we saw in June could be the first glimpse of a cooling market, or it may have been a fluke. We won’t really know for certain until we see the data for the rest of the summer.

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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