- The Washington Times - Friday, January 7, 2011

A new year has begun. What will the Washington real estate market look like this year?

As the spring market unfolds, one of the most significant data points to watch is home listings. It’s the supply part of the supply-and-demand equation.

Listings are the number of homes listed for sale with area Realtors. Those numbers tell us how many people want to sell their homes. As you can see in today’s charts, listings have been lower every year since 2007 - except for that spike last spring. That’s when a lot of people were selling one home so they could buy another and take advantage of the federal tax credits for homebuyers.

Besides that one spike, listings have been falling since 2006 because sales have gotten worse year after year. Yet even with the steady drop in listings since 2006, the inventory grew each year because homes weren’t selling.

The inventory is the number of homes on the market on a given day. In other words, it is the amount of competition you face as a seller. If you are a buyer, the inventory represents the number of homes from which you can choose.

So, as we look ahead to 2011, we are hoping for a drop in inventory and a modest rise in sales compared to 2010. That combination would generate enough competition among buyers to keep home prices stable or cause them to rise. We don’t want prices to go through the roof like they did in 2004 and 2005. That was unhealthy. But moderate increases in home values are healthy.

During the first 11 months of 2010, a total of 114,574 homes were listed with area Realtors. That’s just a little higher than 2009’s 112,090 for the same period.

In 2002, before the market really got crazy, there were 121,000 listings from January through November, compared to the peak of 176,000 in 2006.

Last year’s total of 114,574 took us back to a more normal level of listings, so I wouldn’t expect to see a figure that’s radically higher or lower than that for 2011.

Send e-mail to csicks@gmail.com.

The statistics in this story reflect a metro area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria, Va.;and the District.

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