- The Washington Times - Thursday, October 27, 2005

Last month, the Washington-area real estate market moved the clock back more than five years. Sales chances fell to only 35 percent in September — the lowest we’ve seen since January 2000.

The change has come about suddenly. This spring was the most competitive market on record, with high sales and very low inventory figures making the market ridiculously easy for home sellers and notoriously difficult for buyers.

However, as summer drew to a close, the inventory of homes for sale shot up, and sales fell. Looking at the adjacent fever chart, you can see how high inventory has risen compared to last year.

Notice one other thing: the gap between inventory and sales. When that gap is small, the market is competitive for buyers. As the gap widens, the pressure on buyers subsides.

The clearest way to describe the climate of the current market is to look at sales chance figures. Just a few months ago, in May, sales chances were 91 percent in the Washington area. From there they fell precipitously to 74 in June and 57 in July. Who could imagine that only two months later, sales chances would fall all the way to 35 percent?

Sales chances measure the level of competition in the real estate market. Divide sales figures for the month by the inventory on the last day of the month. A percentage figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a seller’s market.

As you can see, Loudoun County is on the cusp of a buyer’s market, with a sales chance figure of only 20 percent last month. Matters are quite different in Prince George’s County, which was the area’s most competitive market with sales chances of 69 percent last month.

Chris Sicks

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

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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