- The Washington Times - Friday, February 26, 2010

Buyers faced more competition when they went shopping for resale homes in January.

That’s not unexpected. December is always the slowest month of the year for the housing market. January isn’t the best, but it is the month when people start listing homes again, and buyers begin shopping in larger numbers.

The numbers of existing homes listed for sale with area Realtors jumped by 50 percent over December’s new listings, from 6,000 to 9,000.

However, even with 9,000 new listings in January, the inventory of unsold homes rose by just 2 percent. That’s because sales increased by 25 percent.

PDF: Charting the market

That’s the combination that made 2009 a more competitive market than 2008. When inventory remains low and sales are rising, buyers face more competition for the homes that are out there.

A shorthand way of looking at this is what I call sales chances.

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. Higher figures mean we’re in a balanced market or a seller’s market.

Chances rose to 21 percent in January, higher than we saw in November or December.

I expect chances to fall lower than 21 percent in February because of the crippling snowstorms that probably have dampened sales. I would also expect to see a jump in sales chances in March as buyers get back out there.

Stronger competition among buyers this spring could result in rising home prices in the most active jurisdictions. When median home prices do rise, it happens most often during the busy spring market. That’s even more likely to happen this year because of low mortgage interest rates and the federal tax credit.

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