- The Washington Times - Thursday, September 22, 2005

There are still plenty of eager home sellers in the Washington metropolitan area, but the buyers are slowly losing interest.

Some 16,000 homes were put up for sale last month, an increase of 22 percent over August 2004.

Yet home sales fell by 5 percent. By the last day of August, more than 21,000 homes were still sitting on the market. That inventory figure is the highest we’ve seen since the end of 1999.

With inventory up that much, and sales down, it means sales chances are falling dramatically.

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

Last month, sales chances for the metropolitan area were only 51. That’s the lowest figure since October 2002.

Home sales were lower then, but there were fewer homes on the market, too. So the level of competition buyers confronted when home shopping was about the same then as it is today.

What does it mean that sales chances were 51 percent in August? It means that the market is much calmer than it was early in the year, when chances climbed as high as 113 percent.

Today’s buyers will find more homes to choose from, so they can slow down a bit and think. Time to think had been a luxury buyers couldn’t afford in this market — particularly in fast-moving communities like Arlington, Alexandria and Prince George’s County.

Don’t get me wrong. We are still in a seller’s market. We are quite far from the slow-moving buyer’s market of the mid-1990s.

But the current sales climate will mean that prices won’t jump as dramatically. That’s because buyers won’t be outbidding several other buyers to get the home they want.

One word of warning to buyers: Be sure to get a good assessment of a home’s value from your real estate agent before you make an offer. Some sellers might be overpricing their homes in coming months, on the assumption that prices are still rising as quickly as they were in the spring.

Contact Chris Sicks by e-mail ([email protected]).

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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