October was the best month for area home sellers since May. How could this be, considering how much busier the spring market always is in the Washington area?
It’s all about sales and inventory. Sales went up in October while inventory went down. With more buyers purchasing from a smaller pool of homes, sellers enjoyed quicker sales and, sometimes, higher prices.
Sales chances climbed to 43 percent last month, significantly higher than September’s 37 percent.
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.
In October 2011, sales chances were 28 percent because sales were 8 percent lower than this October, and because the inventory last year was much higher.
A smaller inventory is the biggest reason 2012 has been a better year for sellers than 2011. Just 17,261 homes were left for sale in the Realtors’ database on Oct. 31. That was a 31 percent drop from 2011, and a 64 percent drop compared to October 2007, when 48,000 unsold homes were stuck in the inventory.
You can see in the bottom chart that we still had 35,000 homes in the inventory at the beginning of 2009. Inventory has been falling steadily since then, while sales have improved.
We now are well out of the buyer’s market in most of the Washington region. Some areas were strong seller’s markets in October, including the District, Prince George’s County and most of Northern Virginia.
Sales chances almost certainly will fall in November and December as home shoppers stay home. I’m very curious to see what happens early in 2013, considering we will begin the new year with the lowest number of unsold homes since 2004.
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