- The Washington Times - Friday, May 22, 2009

April home sales figures reveal that Virginia is enjoying the best spring market in four years, while Maryland shows modest improvement.

Sales of existing homes in the Washington area rose to 9,510 last month, while inventory stayed nearly flat. It’s the combination of those two things (sales equal demand and inventory equals supply) that determines how hard it is to sell a home. Eventually, the rise and fall of home prices are determined by how difficult it is to sell a home.

Beginning in the fall of 2005, supply skyrocketed and sales fell sharply. It just got worse from there.

To download a PDF of the chart, click here

Last year was the hardest year to sell a home since 1997 because we were stuck with dismal sales and an inventory of more than 50,000 homes that just weren’t selling.

As a result, home prices fell hard. Prices will remain low, or perhaps go even lower, until we see further increases in sales and decreases in inventory.

The good news is that this spring has already shown signs of improvement due to the stronger market we’re seeing in Virginia. Chances there were 33 percent last month.

Sales chances are calculated by dividing a month’s sales figures by the inventory on the last day of the month, resulting in a percentage. A figure below 20 percent indicates a buyer’s market.

Virginia’s inventory fell from 24,000 in April 2008 to 15,900 last month. Maryland’s inventory fell from 24,500 in April 2008 to 21,400 last month.

As a result, sales chances in Maryland were just 17 percent last month. That was an improvement over the 11 percent Maryland saw last April.

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

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