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Charting the market: Contracts just part of sales story
Question of the Day
Last month was the best February for the Washington-area real estate market in six years. Contracts were ratified on 7,421 homes, up 10 percent from last February.
Sales were especially strong in Maryland, where sales beat February 2011 by 19 percent. It was the eighth consecutive month that sales on the Maryland side of the Washington region were higher than those on the Virginia side.
This is a reflection of how the real estate recovery is coming to Maryland, after beginning in Virginia several years ago. Back in 2008, Virginia sales beat Maryland’s by 15,000. But last year, Maryland beat Virginia by 500 sales, the first time since 2006 that Maryland bested Virginia.
The surge in Maryland was led by Anne Arundel, Baltimore and Prince George’s counties. February sales were up 27 percent in Anne Arundel, 34 percent in Baltimore and 25 percent in Prince George’s.
However, part of February’s surge in sales is an illusion. I usually report on ratified contracts rather than settlements because contracts tell you how many buyers and sellers signed sales contracts in a given month. Settlement on those homes can take months, so those figures don’t tell you much about monthly activity.
The problem is, a significant number of contracts never make it to settlement because the buyer can’t get financing or the inspection uncovers problems, among a variety of other reasons.
Contracts fall through more often in Maryland than in Virginia. Of all the contracts ratified in Maryland last year, 25 percent never made it to settlement, compared to 21 percent falling through in Virginia.
Virginia’s Prince William County also had significant problems in this area, with 27 percent of ratified contracts falling through in 2011. But Prince George’s County had the region’s highest percentage at 33.
I’m not trying to pick on Maryland here. I just want to be sure you understand the data I’m giving you. The 19 percent jump in sales contracts in Maryland in February is great news. Let’s hope more of them make it to settlement than last year.
Send email to firstname.lastname@example.org.
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