- The Washington Times - Thursday, March 10, 2011

Somewhat surprisingly, January was the best month for area home sellers since April 2010. January sales were 13 percent higher than sales in January 2010, while the inventory of unsold homes rose 7 percent.

Because sales rose more than inventory, sellers were blessed with a greater level of buyer competition. That’s the key element that has been missing so often in recent years. When buyers aren’t competing with one another, homes languish on the market and prices are flat or falling.

When the ratio of sales to inventory improves, however, we see buyers battling each other a little more to get the homes they want. That means homes don’t stay on the market as long, and prices can begin to rise again.

With sales chances at 25 percent in January, despite a lack of federal tax credits to motivate buyers, I have to be encouraged by how 2011 has begun. Even in January 2010, when the tax credits were available, chances were at just 24 percent.

And if you look back to January 2008, you’ll find that Washington-area sales chances were a depressing 10 percent.

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. Typically, 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 were especially high in Virginia, which is the reason prices have improved there recently. It’s also the reason homes in most Virginia jurisdictions sell more quickly than those on the Maryland side.

But because home prices already are rising in many Virginia jurisdictions, buyers may find the affordability of Maryland counties such as Charles and Prince George’s a strong enough draw to give an additional boost to sales there this year.

Send e-mail to csicks@gmail.com.

The statistics in this story reflect a metropolitan 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 Virginia cities of Alexandria, Falls Church, Fairfax, Fredericksburg, Manassas and Manassas Park; and the District.

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