Although it takes quite a bit longer to sell a home than it did seven years ago, home sales in the Washington area have picked up the pace recently.
In today's charts, I've provided you with days-on-the-market statistics for the month of July in 2005, 2007, 2009 and 2012. July is a good month to look at, because while these homes went to closing in July, the sales contracts generally were signed during the busy spring market.
You can see that Washington-area homes were selling too quickly in 2005.
How can a home sell too quickly? Back in 2003, 2004 and 2005, some buyers were making hasty decisions, frequently paying too much for homes they couldn't really afford.
Today's buyers are much more cautious. So are lenders. That alone slows the process significantly, as lenders require thorough appraisals and more documentation from borrowers.
Remember, too, that a good portion of home sales these days is foreclosures and short sales, which involve a lot of additional paperwork.
Still, we have seen definite improvement since 2007 and 2009. You can see that 2007 was the slowest sales year for many Virginia counties, while 2009 was the slowest in the District and Maryland.
Why the difference? Home prices hit bottom in much of Virginia in 2008, which was 12 to 24 months earlier than Maryland hit bottom.
Buyers respond to price drops, so we saw a rebound in buyer activity first in Virginia, and then in Maryland.
And, while we don't want buyers to get so competitive that they start making hasty decisions again, it is encouraging to see these days-on-the-market statistics drop. Buyers who are actively competing with one another push up home prices.
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