- The Washington Times - Friday, February 20, 2009

This year’s real estate market got off to a positive start, with about 5,800 sales of existing homes in January. That’s an increase of 20 percent compared to January 2008.

Even so, last month’s sales were quite a bit lower than in past years - but at least things are moving in the right direction.

This could be the year that the Washington-area real estate market begins to rebound, but it will only happen if sales continue to be stronger than last year.

To download a PDF of the chart, click here

Plus, I would like to see sales rise throughout the metropolitan area, not just in Northern Virginia. That 20 percent increase in sales last month was due entirely to a 42 percent increase in Virginia sales. Maryland sales were flat compared to last year.

Another key statistic is showing improvement on both sides of the Potomac. The number of homes listed with Realtors in January was down by 27 percent in both Virginia and Maryland compared to January 2008. That means we aren’t starting 2009 with as many homes on the market as last year.

That’s good news because the surplus of unsold homes is the reason prices have been falling in recent years. Reducing the number of homes for sale and increasing the actual number of sales are the two things we need to see if 2009 is going to be a better year for real estate.

That doesn’t mean prices are likely to rise this year. Better sales and lower inventory will simply help stabilize prices and prevent further declines. Prices won’t begin to rise until buyers are competing with one another to get the homes they want.

It’s hard to believe that will ever happen again, but real estate is cyclical. One day, we will see another seller’s market, and prices will rebound. We just have to be patient.

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

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