- The Washington Times - Wednesday, February 22, 2006

Looking at January’s sales data, it’s hard to believe only one year has passed. Last month, there were 26,000 homes on the market, compared to 7,300 in January 2005. That 257 percent increase meant that Washington-area home buyers had plenty of homes to choose from last month.

But only 7,590 homes were sold last month, an 8 percent drop compared to last year. It was the slowest January since 2001.

Homes that did sell were on the market longer. Most of the homes sold in January had been on the market for more than 50 days. Those sold in January 2005 were generally on the market 30 to 40 days.

Of course, homes sold in January tend to have the longest time-on-the-market figures because many languished through the slow holiday periods of November and December.

The most dramatic change during the past year was in sales chances. Last month, chances were 29 percent. This indicates that January was a balanced market, favoring neither buyers nor sellers.

January 2005, however, was an extreme seller’s market, with sales chances of 113 percent.

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 balanced market or a seller’s market.

Sales chances will probably rise a bit in the coming months, but I don’t expect them to get out of the 30s.

If the market is flooded with more homes for sale, however, sales chances could fall instead of rise. Buyer demand simply won’t be sufficient this year to absorb inventory the way it did in the spring of 2005.

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