Last month was the best month for buyers since 1997. All over the Washington area, buyers could negotiate from a position of strength when making an offer on a home.
Sellers, many of whom didn’t want to believe the seller’s market was over, seem to be finally accepting this truth. And that’s causing sales prices to drop.
Sales chances were only 16 percent in the metropolitan area in July, due to lots of homes for sale and a drop in the number of sales.
Compared to June, there were 700 more homes for sale and 600 fewer sales. This caused sales chances to fall from 18 to 16 percent — the lowest since 1997.
Dividing sales figures for the month by the inventory on the last day of the month results in a percentage, which I call “sales chances.” A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.
Prince George’s County was the only jurisdiction in the region that managed to hold onto a 30 percent sales chance figure last month. Loudoun County had the lowest chances, once again, at only 9 percent.
The slower market is now having an effect on home prices, although it took a while for sellers to accept the fact that their home may not be worth what they expected.
Until July, prices were generally holding steady, even gaining slightly over 2005. Those gains were erased in many counties last month.
Median sales prices in Arlington fell 15 percent from June to July, and July’s figures were down 9 percent compared to July 2005. Other jurisdictions saw prices fall by single digits last month.
In fact, sales prices fell in every Washington-area jurisdiction between June and July. Only in affordable Baltimore County and Baltimore City did we see prices rise.
Once again, I must caution you not to read too much into a single month’s data. Home price data is particularly slippery, and it’s always safer to draw conclusions from a full year’s data.
That being said, the fact that median prices fell throughout the region in July does seem to indicate that the slower market is causing sellers to accept lower offers. Sellers were reluctant to do so earlier in the year. But now that homes regularly take two to three months to sell, home sellers seem to be willing to take a hit to make a deal.
Contact Chris Sicks by e-mail (firstname.lastname@example.org).
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.