- The Washington Times - Wednesday, May 18, 2005

Well, maybe the Washington-area real estate market isn’t ready to cool off quite yet.

April reversed March’s 7 percent drop in area home sales with a 7 percent increase over April 2004.

Nearly 13,000 existing homes were sold last month, indicating that there is still plenty of demand among area home buyers.

There was also a jump in area home listings, which might lie behind the increase in sales last month. In previous months, a shortage of available homes may have dampened home sales. In April, however, more than 16,000 new listings came on the market, and buyers obviously were eager to snatch them up.

Buyers are so eager that they are pushing home prices up faster than ever before. Even though home prices have already jumped dramatically in recent years, it appears that 2005 prices are rising even more quickly than they did in 2004 or 2003.

Last month, most Virginia jurisdictions saw median prices rise by 30 percent or more. In Maryland, prices were up 18 percent to 32 percent last month.

Such rapid price increases have been sustained only by low mortgage interest rates and the phenomenon of interest-only mortgage payments. Once rates rise, I believe, home prices will level off soon thereafter.

High prices are behind some of the strongest demand for homes. This year, buyer demand is greatest outside the Beltway. Looking at total sales for the first four months of the year, sales are up the most in Stafford, Prince William and Frederick counties. Each of these offers more home for the money.

But those prices aren’t staying low. Compared with April 2004, median prices rose 25 percent in Frederick County and 32 percent in Prince William.

Contact Chris Sicks by e-mail (csicks@gmail.com).

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