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Washington home market: Buyers are back

The buyers are back in the Washington-area home market, according to a market trends report released Tuesday morning by MRIS (the local multiple listing service) and real estate research firm Delta Associates.

Sales volume and prices rose in the first three months of this year in the D.C-area market, the report said. Sales volume was up 9.2 percent from a year earlier; the average price, at $357,983, was up 4.9 percent.

The strongest price gains occurred in some areas hit hard by the foreclosure crisis: Loudoun and Prince William counties. Compared with a year ago, average prices in Prince William rose 26 percent, while in Loudoun they rose 11.9 percent. However, Prince George's County remains behind the curve: Prices there fell 17.6 percent compared with last year.

Homes are selling faster than a year ago. In the inner suburbs (Fairfax, Montgomery and Prince George's counties) homes stayed on the market an average of 73 days, which is slightly below the area's long-term average of 76 days. In the outer 'burbs, (Loudoun, Prince William and Frederick counties) homes typically stayed on the market 61 days. In the core of the region (the District, Arlington and Alexandria) time on market averaged 77 days.

Throughout the area, there was a 5.7-month supply of housing on the market in March. "In recent years, Washington area average prices tend to rise when the ratio of inventory to sales is below six months' worth," the report said. "Lender constraints may hinder a quick rise in prices, but the gap between supply and demand is closing in the Washington area." Again, Prince George's is the laggard: It has 7.4 months' worth of inventory. Arlington had the least supply, with only 4.4 months' worth.

Condo market: Across the region, new condo prices (taking the value of sales concessions into account) were down 6.4 percent from a year ago. (In Arlington and Alexandria, prices rose 1 percent.) In March there were 5,226 unsold new condo units on the market--the smallest supply since 2003.

Here's where it gets interesting: Developers are offering fewer sales concessions in the 'burbs, but they're offering more in the District. And it's not because there's a boatload of supply in the city, either.

"The actively marketing pipeline has declined to a point in the District that most of the new inventory left is considered 'dogs,' which necessitates steeper concessions in order to sell those units with inferior views or layouts...Before price increases become the norm again, the leftover 'dog' inventory of condos in most submarkets needs to be absorbed and new, more desirable product needs to be introduced to the market. We look for this to be the metro-wide norm by 2011," the report says.

So, if you value drama over dollars, it looks like you need to wait until next year to buy a condo in the District.

By Elizabeth Razzi  |  April 27, 2010; 8:00 AM ET
Categories:  Statistics , The economy , The market  
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Comments

The exception to waiting until next year is if you are a first time homebuyer and you can make an offer in the next three days. The $8,000 tax credit that expires April 30 is the equivalent of what, $15,000 in pretax money in your pocket? Deduct that off the price of any condo you're thinking of buying in DC.

Posted by: tcal02 | April 27, 2010 9:43 AM | Report abuse

Elizabeth - great post, and very exciting news for those folks in the market, or those looking to sell their home. We've been operating in the DC/Bethesda/McLean markets for years now, and today's climate is one of the most exciting we've seen, both for buyers and sellers. Particularly with the housing opportunity/affordability indices posting enticing statistics (http://bit.ly/bneJ1T), the coming months will spell great news for the DC realty landscape.

Posted by: WydlerBrothersRealtyTeam | April 27, 2010 10:47 AM | Report abuse

Let's waiit and see the #s in the months after April 30th. And I think we/you should take a special look at Prince George's County. It is one of the biggest Counties in the region and the negative slide continues.

Posted by: 4thFloor | April 27, 2010 12:13 PM | Report abuse

I hate to strike a pessimistic note but in my 50 plus years owning real estate in DC, I have seen a couple of serious downturns in the housing market, occasioned by the federal government's decision to cut expenditures.

I expect serious attempts to cut the deficit in the next year or so which could dry up hiring opportunities. If and when that happens, you will see a serious slide in demand for housing and a lowering of prices and rents.

So enjoy the recovery while it lasts.

Posted by: loyalsyst | April 27, 2010 12:51 PM | Report abuse

Everyday there are conflicting stories about the housing market. Whatever...

Posted by: 123cartoon | April 27, 2010 2:09 PM | Report abuse

I would be very skeptical of this report, there are no considerable new hires and econonmy is still sluggish, the stimulus may have motivated few who really cant wait any longer, but once the incentive goes away and especially as the mortage rates go up, we are back to square one.

Posted by: Jim110 | April 27, 2010 8:01 PM | Report abuse

Goldman Sachs CEO also said the "lenders" will be back soon ... so just hang in there -- by mid spring this thing will be in full bloom -- we'll have Realtors bustling all around the place and mortgage originators ready to dole out loans to people that have a pulse.

Just hang in there ... and this time around buy the biggest place you cannot afford to repay -- uncle sam will bail everyone out.

Posted by: free_np | April 27, 2010 8:31 PM | Report abuse

Another great one-sided Razzi real estate pumping article. Sales are up because the DC job market has been insulated and with big government spending and recent news like the Northrop Grumman HQ relocation it doesn't seem like its going to end any time soon. I keep seeing coworker after coworker buy overpriced properties they can barely afford to get the 8k tax credit. If layoffs happened and they couldn't get new jobs in a week like you can right now they would all foreclose because they are single incomes with no savings. Its great news if you are a seller, but if you are a buyer beware you are fueling a secondary bubble that could end with government spending cuts, especially in the defense sector.

Posted by: angryva | April 28, 2010 8:28 AM | Report abuse

How can this author not mention the tax credit that expires April 30th? People are frantic to get a deal done before it expires which is driving up prices and sales. I do not know what will happen when it expires but it is certainly relevant to the article.

Posted by: HockeyMike351 | April 28, 2010 9:24 AM | Report abuse

uninformative. why not just post a link to the actual report? aren't journalists supposed to cast a *critical* eye over what the local real estate industry says?

Posted by: unitedunited | May 2, 2010 10:25 PM | Report abuse

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