- - Thursday, April 19, 2012

Sales of existing homes in the Washington area jumped 26 percent from February to March. Apparently, area homebuyers are feeling more confident than they have in years.

Contracts were ratified on 9,315 homes last month, an increase of 4 percent over March 2011. It was the best March we’ve seen since 2006 - when the real estate meltdown had just begun.

Last month’s sales were particularly strong in Anne Arundel, Howard, Arlington and Fairfax counties and Alexandria.

Now, I need to revisit one thing I mentioned a month ago. For years, I have reported on the number of ratified contracts instead of settlements. Contracts tell us how many buyers and sellers signed sales contracts in a given month.

During the first quarter of 2012, the number of ratified contracts was 6 percent higher than it was in the first quarter of last year.

Of course, it typically takes one to three months before those buyers and sellers sit down at the settlement table. When they do, it will be recorded as a final sale, or settlement. Because a significant number of contracts never make it to settlement for various reasons, settlement data always will be lower than contract data.

So far this year, settlements are even with last year. A total of 20,020 settlements occurred during the past three months, compared to 20,050 during the first three months of 2011.

What does all this mean? One thing I conclude is that buyers are quite active, more than they have been in years. That is helping keep our home prices up.

Yet we have to recognize that the increased scrutiny coming from lenders and appraisers is causing more contracts to fall through than in the past. That’s why I will continue to share both settlement and contract data so you can understand the market better.

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