- The Washington Times - Friday, April 23, 2010

March was the biggest month for Washington-area home sales in nearly five years. More than 10,000 existing homes were sold last month. August 2005 was the last month to see sales higher than 10,000.

There are, of course, some factors that made March such a big month. The thick blanket of snow on the entire region diminished February sales, so there surely was some pent-up demand among buyers that transferred from February to March.

But a look at the sales activity during the first two weeks of April revealed that buyers are just as active this month as they were in March.

PDF: Charting the market

What we are seeing is an overall boost in spring sales this year due to the federal homebuyers tax credit, which is only valid if you have a ratified contract to buy a home before May 1. So some of our current sales might be folks who otherwise would have waited to buy in the summer or fall, but are motivated now by the credit.

When that credit goes away (and it already has been extended once) we could see sales cool in the summer. As you can see in today’s charts, sales always drop off from the spring to the summer, so we know we’ll see sales decline by June or July. What we don’t know is whether they’ll decline more than usual this year because of all the spring activity.

As we discussed last month, Maryland is experiencing a more robust market than Virginia this year. Sales in Virginia have reached more of a plateau while Maryland sales are surging, especially in Montgomery and Prince George’s counties.

Virginia’s higher sales in 2009 prevented prices from falling any further. If sales continue to be strong in Maryland, it should have a similar effect on prices there - possibly even bringing prices back up a bit this year.

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