- The Washington Times - Friday, October 9, 2009

New-home builders are not having a great year, but it’s going better than 2008.

A total of 8,603 new homes were sold in the Washington region during the first eight months of the year, according to data from Hanley Wood Market Intelligence.

That’s an increase of 3 percent over last year’s 8,361 sales for the same period. It’s not much, but builders will take it.

Still, the surge we’ve seen in the existing-homes market this year eclipses the rise in new-home sales. Existing-home sales have shot up by 22 percent this year, so the new-home recovery is clearly lagging behind the resale market.

Charting the market: View graph of new home sales in the district, Virginia and Maryland.

This surely has something to do with prices. Buyers are very price-conscious right now. A Realtor told me last week that he tried to put in offers on two resale homes priced below $300,000. He gave up because one of the homes already had received 15 written offers. The other had gotten 20 offers, and 18 of those buyers were offering cash.

Those homes were in Fairfax County, where the median sales price for existing homes was $381,500 in August. That’s lower than the median base sales price of new homes in Fairfax this year of $416,500. Also, notice that new homes in Fairfax have come down from $570,600 last year. That’s a drop of 27 percent in one year.

New-home prices haven’t fallen that sharply throughout the region. However, builders who feel the pressure to compete for price-conscious buyers are cutting prices.

The median base price for new homes sold this year fell in every jurisdiction but two - the city of Alexandria and the District.

Prices in the District actually have risen 11 percent this year, driven mostly by a 23 percent jump in the price of town homes sold there. That increase reveals some evidence of price sensitivity among buyers in the District.

Buyers seem to be flocking to town homes because of the higher cost of single-family homes in the city. Town-home sales are up 125 percent this year, while single-family sales have fallen by 17 percent. That’s probably one reason single-family prices have fallen 8 percent this year.

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

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