Washington-area home sales were up 12 percent in July, beating last year’s mark soundly and even outselling June, which usually doesn’t happen.
Once again, however, you have to dig beneath the regional statistics to see what’s really going on. Sales were down in many jurisdictions, with explosive sales in just two counties making up most of the increase in sales.
Of the 7,433 existing homes sold last month, 2,900 of them were sold in two counties, Prince William and Fairfax. Those counties absolutely dominated home sales in July, capturing almost 40 percent of all sales. Montgomery was the next-biggest-seller with 882 sales - only 12 percent of July’s total sales.
For even more perspective, compare July 2006 to July 2008. Two years ago, Montgomery had 1,182 sales to Prince William’s 611. Last month, Montgomery was beaten by 400 homes.
What changed in only 24 months? Prices.
The median sales price in Prince William County was down 40 percent last month. That is the largest drop in home prices in the region. With the average detached home selling for only $295,000 last month, home buyers were running to Prince William to get a deal.
That hurt counties like Stafford, where only 185 homes were sold last month. That makes sense. If you work inside the Beltway, why would you drive past all those deals in Prince William to buy a more expensive home in Stafford?
You can live even closer to downtown if you buy in Fairfax, where prices were down 21 percent in July. That’s the largest price decline we have seen in Fairfax, and it’s probably the reason sales there were up 20 percent last month.
So what can a big, close-in county like Montgomery do to spur sales? Prices need to fall a little further, I think. The median sales price in Montgomery County was down 17 percent compared to July 2007, but in the case of Fairfax, it wasn’t until prices were down by 20 percent that sales really picked up.
Perhaps when home prices fall a little more in Montgomery, we’ll see sales pick up like they have on the other side of the river.
c Contact Chris Sicks by e-mail (email@example.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.