- The Washington Times - Thursday, February 16, 2006

A new real-estate year is up and running, and the question on many minds is “what lies ahead?”

Will the Washington region shake off the slowdown that took hold at the end of last year? Will sales rebound and absorb the high inventory of homes on the market? Will home prices rise this year? If so, how much?

January’s sales figures alone won’t be able to answer these questions, but they do tell us something about the market climate.

Speaking of the climate, we can’t use the weather to excuse last month’s 8 percent drop in sales. It was beautiful home-shopping weather for January — a month that can suffer slow sales when the weather is poor. In 2004, for instance, sales fell 4 percent during an inclement January.

So, if sales fell 8 percent in mild temperatures, how strong will sales be in the coming months?

More of the same, I suspect. Sales will increase as the spring market heats up. That happens every year. But compared to last year, sales will be down — except in Prince George’s County. This jurisdiction did particularly well last year, with strong sales and more buyer competition than in any other county in the area.

In January, Prince George’s was the only jurisdiction to post an increase in sales over 2004. The affordability of Prince George’s should mean it will be popular with buyers throughout this year.

Back to those questions everyone is curious about. I have to say that January’s mediocre performance doesn’t make the forecast for 2006 very bright.

Buyers might like it, though. There were 26,000 homes on the market at the end of January, compared to only 7,300 on Jan. 31, 2005. Last month’s buyers had plenty to choose from.

Plus, the surplus inventory should help keep prices down, which buyers will find to be a most welcome change.

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

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