Now that the Washington area has entered the cooler half of the year, home prices are not rising like they did in the spring. That doesn't mean your home's value has fallen, it just means we won't see much appreciation until the next spring market.
I know today's fever charts are so full of data they aren't easy to digest at a glance. But I wanted you to see how prices have moved since 2008 -- the year many area jurisdictions hit bottom.
If you focus on the 2012 data, you should be able to see that prices rose in almost every jurisdiction during the spring. Since then, they've leveled off.
Home prices tend to rise in the spring because that's when homes sell most quickly. Buyers compete with one another for the most attractive homes, and many sellers never need to reduce their asking price because they find buyers first.
So, in the Washington metropolitan region, home prices most often rise from February through June.
Prices rise when we have strong buyer activity and a relatively small number of unsold homes. Taken together, I come up with a figure I call sales chances.
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.
Prices are rising this year because sales chances have reached their highest level since 2005. Inventory is down, and buyers are active once again.
These high sales-chance figures are the reason the following jurisdictions were strong seller's markets in August: 48 percent in the District, 52 percent in Fairfax County and Alexandria and 53 percent in Prince George's.
Sales chances fall every autumn, as buying activity tapers off. Less competition from buyers means home prices typically level off. Depending on the weather in January and February, we will see chances shoot back up early next year, and prices likely will climb, too.
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By Elaine Donnelly
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