- The Washington Times - Friday, January 2, 2009

As we neared the end of 2008, the supply-and-demand problem facing the Washington-area real estate market was marginally better than it had been in 2007.

In November, about 8,400 homes were listed for sale with area Realtors. That’s about the same number as November 2003. We had been seeing much higher listings in recent years, so it was good to see listings fall back to 2003 levels.

Sales were much better in 2003, however, so the market could absorb another 8,000 homes without a problem.

Now that homes are taking 3 to 4 months to sell on average, every additional home that is listed just makes our oversupply problem worse.

Fortunately, listings were down for almost all of 2008. Ever since March, sellers added fewer homes to the inventory than in 2007. Realtors posted 136,000 listings during the first 11 months of 2008, compared to 154,000 during the same period in 2007.

Folks are finally beginning to understand that it’s just not a great time to sell. As a result, fewer are listing their homes for sale, and fewer listings can help with our inventory overload. That will eventually help the market bounce back.

Remember that home listings are not the same as inventory. The inventory is the number of homes on the market on a given day. In other words, it is the volume of competition you face as a seller. If you are a buyer, the inventory represents the number of homes you can look at as you shop around.

The home-listings data in today’s charts refer to the number of homes put up for sale in a given month. In 2007 when sales were terrible, the huge number of listings just pushed inventory higher and higher.

In 2008, sales were higher and listings were lower. As a result, the inventory of unsold homes fell to 43,700 at the end of November, which was 9 percent less than the inventory in November 2007.

That is still a much larger inventory than we had a few years ago. If 2009 is going to be a better real estate market, it will be because sales continue to bounce back, and listings either fall or remain the same.

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

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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