- The Washington Times - Thursday, January 26, 2006

Home sales fell to their lowest point of the year in December, making it the slowest and calmest month of 2005.

The real estate market cools at the end of every year in the Washington metropolitan area, but last month must have seemed extra cool, considering how hot the market had been in the spring and summer.

What a difference six months makes.

Last month, sales were down 16 percent compared to December 2004. And, due to a lack of sales activity and a large number of eager sellers, the inventory of homes on the market rose 143 percent.

The inventory change is the most important factor in this story.

Historically speaking, 6,559 is not a low number of sales. However, when there are 24,410 homes in the inventory, things have definitely shifted in the buyers’ favor.

Sales chances for the metropolitan area were only 27 percent last month, compared to 77 percent in December 2004.

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.

In fact, three counties in the area were officially buyer’s markets in December: Stafford, Spotsylvania and Frederick. All three had sales chances below 20 percent last month.

Notice that these three counties all are far from the Beltway.

Because of this, they are affordably priced and popular with buyers.

But, when this area’s market cools down, the outlying counties tend to cool down first.

As expensive as the close-in jurisdictions are, they remain (relatively) popular with buyers.

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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