- The Washington Times - Friday, September 28, 2007

Once again, a severely bloated inventory of homes dragged down the housing market in the Washington metropolitan area. August was the third consecutive month with more than 50,000 existing homes on the market.

Despite such an abundance of selection, buyers purchased just 5,386 homes last month. That is 31 percent fewer than in August 2006 and half as many as in August 2005.

Sales chances were incredibly low in some markets — 9 percent in Loudoun County, 8 percent in Frederick and Prince George’s counties, and just 7 percent in Prince William and Stafford counties.

Sales chances are calculated by dividing a month’s sales figures by the inventory on the last day of the month, resulting in a percentage. A figure below 20 percent indicates a buyer’s market.

Higher figures mean we’re in a balanced market or a seller’s market.

Overall in the Washington area, sales chances were 11 percent last month.

You have to look back to August 1996 to find the last time chances were this low.

It’s probably not going to get better for at least four to six months.

We are entering the slowest sales period of the year, which won’t do much to diminish that bloated inventory.

Sales will pick up in early 2008 because the spring market is always the most active part of the year.

But just how active will it be? The level of buyer interest we see in the first four months of 2008 will tell us whether next year’s market will be stronger or weaker than it is right now.

However, just as the recent seller’s market lasted about seven years, our current buyer’s market isn’t likely to disappear quickly.

We are only two years into it, so home sellers need to get used to the fact that buyers are going to have the upper hand for quite some time.

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.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide