- The Washington Times - Friday, January 4, 2008

Despite a slow sales climate throughout the year, people still wanted to sell their homes at the end of 2007. Some people, perhaps, wanted to free themselves of unwieldy mortgages, and some folks had to move because of job or life changes. Others saw the abundant buying opportunities as a chance to move up to another home.

For these reasons and more, about 10,000 homes were put on the market in November. That was 8 percent more than in November 2006 and 100 percent more than November 2004.

Remember, of course, that home listings are not the same as inventory. The inventory is the supply part of “supply and demand.” It is the number of homes on the market on a given day.

Home listings data, on the other hand, tells us the number of homes put up for sale in a given month, which certainly affects the supply. When the homes that are listed don’t sell, the inventory grows, and that is what we’ve seen happen in the past two years.

The adjacent fever chart shows how dramatically home listings increased in the fall of 2005. At the same time, sales were falling. As a result, the inventory (supply) rose dramatically.

As you move into 2006, you can see that listings continued to grow, even though sales were poor. Sellers continued to throw homes onto the market in 2006 despite declining buyer interest. During the first six months of 2006, home listings were up by 34 percent while sales fell 23 percent.

Listings dropped in 2007, but not enough to help the market. Sales continued to drop as well, which made 2007 the toughest year to sell a home since the mid-1990s.

As we look forward into this new year, people will continue to sell their homes. Will 2008 be a better sales climate than last year? It all depends on how many folks try to sell, and how many folks want to buy.

It sounds simplistic, I know, but that supply-and-demand stuff is really what it’s all about.

Chris Sicks

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

The statistics in this story reflect a metro 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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