Charting the market: ‘09 sales are best since ‘06

The first half of 2009 has been the best six months for Washington-area real estate since 2006.

Sales of existing homes were up 23 percent over the first half of 2008, and some jurisdictions experienced an even greater resurgence. Prince George’s County, for example, saw sales rise 59 percent compared to last year. Stafford was up 40 percent, and Frederick was up 32 percent.

Although Prince William County was up by “only” 23 percent this year, sales there shot up 85 percent during the first half of 2008. So, it’s actually amazing that sales rose even further this year.

What caused all this activity among buyers? After all, the economy is still struggling and unemployment remains high. Mortgage interest rates are low, but not quite as low as they have been.

The cause of all this activity is the price drop we saw in 2008. Median prices for existing homes in the Washington area fell hard last year.

Sales prices dropped 11 percent in Montgomery County, 14 percent in Prince George’s County, 19 percent in Fairfax County, 20 percent in Loudoun County and 39 percent in Prince William County.

As a result, the median price in Prince William this January was just $165,000 - compared to $280,000 in January 2008 and $390,000 in January 2006. With homes in Prince William selling for less than half of what they were worth three years ago, it’s no wonder buyers have been drawn there this year.

Although prices haven’t fallen as sharply in other jurisdictions, they are down significantly. And that has lit a fire under buyers.

Sales should cool off during the last half of the year, but I expect sales to remain higher than last year, as buyers take advantage of the large selection of available homes at good prices.

Contact Chris Sicks by e-mail (csicks@gmail.com).