By the end of July, sales were closed on more than 41,000 existing homes in the Washington region. That's an increase of 5 percent over last year and one of the reasons area home prices have begun climbing upward again.
What has made this year a good one for area home sellers?
Well, it wasn't free dollars from the federal government. You can see in today's charts how those credits boosted sales in 2009 and 2010, but those homebuyer tax credits expired in April 2010. This year has done well regardless -- no free money required.
It's also not interest rates that have boosted sales in 2012. Rates are very low this year, that's true. But they have been unusually low for years.
It certainly isn't easy mortgage money that's helping buyers. Lending standards have grown quite strict, with lenders requiring a lot more from borrowers than in years past.
I think 2012 has been a solid year for area home sellers for the following three reasons:
1) The local economy is much better than that in the rest of the country. Unemployment figures are lower than the national average, and we have great-paying jobs around here. Ten of the wealthiest 15 counties in America are in the Washington region.
2) Home prices have stopped going down. Prices hit bottom in 2008 in Virginia, while most of Maryland didn't hit bottom until 2011. But now, buyers who were skittish about where prices were headed can buy with more confidence.
3) Because of the first two reasons, move-up buyers are active once again. Folks who felt stuck in their homes several years ago increasingly are able to make a switch. When they sell their $300,000 home and buy one for $500,000, dozens of people benefit in a variety of real estate businesses. And that's good for the region's overall economy.
You may have noticed that today's charts provide settlement data rather than the usual sales contract data. The contract data is more indicative of what buyers are doing in a given month, but many of those contracts never go to settlement.
So, I periodically like to share settlement data with you because it is more concrete.
-- Chris Sicks
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