- The Washington Times - Thursday, September 9, 2010

Although sales activity has dropped significantly since spring, one housing statistic should be encouraging to homesellers. Homes are selling more quickly than in recent years. Not as quickly as they were in 2003 through 2005, but that’s not a fair comparison.

During those years, the market was flooded by a horde of investors and a heap of unqualified buyers. They created artificial demand for an insufficient supply of homes.

As a result, Washington-area homes were selling very quickly in 2005, as you can see in the charts.

Homes were selling too quickly, really. When the average home in Northern Virginia was selling in just two to three weeks, there was an unhealthy pressure on buyers to bid prices higher and higher.

This competition among an unprecedented number of buyers is what caused area home prices to get so high. Then, the lack of competition from 2007 through 2009 made prices fall.

On the Virginia side of the Potomac, days-on-the-market statistics reached their worst point in 2007. The Maryland market didn’t reach its slowest point until 2008 and 2009.

To see just how quickly things slowed down when the seller’s market disappeared, let’s take a closer look at Prince William and Stafford counties in Virginia.

In July 2005, homes were selling in about three weeks in Prince William and Stafford. Two years later, it took more than 15 weeks to sell a home there.

No wonder prices fell so much. When you’re waiting three, four or five months to sell your home, you are more likely to accept a low offer from an aggressive buyer.

The drop in prices, however, eventually enticed buyers to come back. By 2010, Prince William County was the fastest-selling jurisdiction in the region.

The sales pace has picked up in Maryland, too. You can see that the time it took to sell a home in Prince George’s County fell from 138 days in July 2009 to just 77 days this July.

That’s evidence of a market that has become much more active. Buyers have been drawn to Prince George’s by the same affordability factor that drew them to Prince William in 2008 and 2009.

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