- The Washington Times - Thursday, August 5, 2004

The first six months of 2004 were extremely difficult for area buyers, as home prices shot up to unimaginable levels on a small inventory of homes. Many buyers found they had to offer more than the asking price to compete against other eager home shoppers.

So eager are the buyers this year that nearly 67,000 existing homes were sold in the first half of the year. That is 10 percent more than were sold in the first half of 2003, and two or three times the typical sales levels of the mid-1990s.

The tortures home buyers have faced this year are the same ones we’ve seen during the past three years: There aren’t enough homes available, and too many buyers want them. This dynamic has kept sales figures high and inventory figures low, resulting in a sales-chance figure of 82 in June.

Sales chances are the measurement I use to express supply and demand. Sales chances are a measure of market activity calculated by dividing home sales by inventory. In the accompanying charts, you can compare the chances for this year with previous years, as well as compare the region’s primary jurisdictions with one another.

One figure that should [R]jump out at you is the 2004 sales chances for Prince George’s County.

In June, Prince George’s was the most competitive market in the Washington region — a sentence I never imagined I would write. Here’s why: Just a few years ago and throughout the 1990s, Prince George’s County and nearby Charles County were always the least competitive markets in the region. When sales chances were 38 in Montgomery, they were 18 in Prince George’s. When chances in Montgomery climbed to 51, Prince George’s made it only to 26.

But it has been the success of counties such as Montgomery that has allowed Prince George’s to catch up. Demand for homes in Fairfax, Arlington, Alexandria and Montgomery has pushed prices in those markets to ridiculous levels. As a result, buyers are seeking more-affordable homes, often in distant counties such as Stafford and Frederick.

But Prince George’s offers a combination no other county can — a market that straddles the Beltway where the median price for a home is only $225,000. And that’s why Prince George’s County was the hottest market of all in June.

The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.

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