Friday, April 2, 2010

Whether sales rise or fall in a given year, you can’t understand the pulse of the housing market without looking at inventory, too.

Besides, the wild winter weather we experienced at the start of 2010 makes sales figures a little hard to interpret. Perhaps a look at the inventory throughout the Washington region would be helpful to both buyers and sellers.

Buyers are always hoping for high inventory and low sales. That means less competition from other buyers and sellers who are motivated to make a deal.

Sellers, of course, want the reverse. A tight inventory and strong sales mean prices can rise and sellers will enjoy speedy sales.

Looking at the sheer number of homes on the market in each jurisdiction is only so helpful because each county and city is its own remarket.

Today’s charts show how many homes are on the market compared to the total housing stock in each jurisdiction.

PDF: Charting the market

You will see that Alexandria, Va., and Arlington, Va., have the fewest homes up for sale - less than 1 percent of the total housing stock in those jurisdictions. Homes also are selling well in Arlington and Alexandria, which has kept the inventory figure down and pushed prices higher than they were a year ago.

If you go outside the Beltway in Virginia, however, you’ll see that more and more homes are on the market.

Prince William County still has a lot of unsold inventory because of a flood of foreclosures in recent years. Rural counties such as Warren and Fauquier have even more homes up for sale, and slow sales to boot.

Sales are much stronger in Prince William. Despite the large percentage of homes on the market there, February prices were up 27 percent over past year because buyers have been very active there ever since prices fell 39 percent in 2008.

On the other side of the Potomac, we find low inventory in the District and Montgomery County and higher inventory the farther you go from the Beltway. I expect to see stronger sales activity in Maryland this year, which could cause prices to rise a bit in the counties with tighter inventory figures. Prices are already inching up in Montgomery County.

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