- The Washington Times - Wednesday, September 27, 2006

Ever since January, the number of homes on the market in the Washington metropolitan area has been climbing. On the first day of 2006, there were about 24,400 existing homes for sale in the region. That was more than double the number of homes we began with in 2005.

So, right from the start, this was a year offering selection to buyers and frustration to sellers.

But it got even worse for sellers with each passing month as record numbers of homeowners decided to sell. In January alone, 13,500 homes were put up for sale, compared to only 6,000 in January 2005.

As each month passed, more and more homes were listed for sale, and home buyers just weren’t interested enough to absorb the flood of new listings.

Finally, in July, the number of homes being listed fell below last year’s pace. New listings were also down in August.

That decrease in the number of new listings is now helping our surplus inventory situation, if only a little bit.

Our region’s inventory peaked in July at 48,737.

At the same time, July was also a very slow sales month, so sales chances were only 16 percent.

(Dividing sales figures for the month by the inventory on the last day of the month results in a percentage, which I call “sales chances.” A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.)

In August, inventory fell for the first time all year, to 47,455. That modest decline, coupled with steady sales, meant that sales chances improved to 17 percent.

Could this also mean the market has finished cooling down? It’s too soon to say.

If the number of homes being listed continues to taper off, and if the standing inventory of homes for sale declines as well, it would help matters quite a bit.

However, if homeowners continue to flood the market with listings and buyers continue to show only modest interest, we could see the market cool even further.

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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