- - Thursday, May 24, 2012

Last month was another busy one for area buyers, as they signed contracts on 9,146 homes in the Washington area.

And, because inventory was 27 percent lower than in April 2011, buyers had to compete more fiercely to get the homes they wanted.

A quick look at the bottom chart will help you understand how much better 2012 has been. The lines on the bottom of the chart represent sales, while the top ones represent inventory. Notice that this year’s sales have been running ahead of the past three years. That’s good, because we need active buyers to have a healthy housing market.

The top lines are more important, however, because it was the huge backlog of unsold homes that caused home prices to fall in recent years.

Look at how low the inventory has been this year. Because the inventory of unsold homes has fallen at the same time as sales have increased, we have seen movement in two more statistics. The time it takes to sell a home has dropped, and home prices have risen.

Homes sold in Fairfax County in April spent just 48 days on the market, compared to 58 days in April 2011 and 108 days back in 2008.

Median sale prices are up 5 percent in Fairfax, 7 percent in Prince George’s, 13 percent in the District and 28 percent in Arlington.

Taken together, these encouraging sales and inventory figures tell us that sales chances were 46 percent last month, quite an increase from last April’s 31 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. A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.

It was especially good to see chances climb to 49 percent in Prince George’s County. The recovery has been slower there because of a large number of foreclosures and short sales. The level of competition among buyers that we saw last month is exactly what is needed to bring prices back up in Prince George’s.

Send email to csicks@gmail.com.

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