April home sales numbers are out. Both DC and Northern Virginia markets have shown positive development particularly in Northern Virginia.
NORTHERN VIRGINIA
According to NVAR that covers Alexandria, Arlington, Fairfax, Falls Church areas, the total number of homes sold in April is up 6.12% from 1,455 to 1,544 homes. It's even better on the number of homes under contract (or pending sales) where it is up 24.8% from 2,157 to 2,692 homes.
Days on the market getting shorter. It drops from 100 days to 85 days, a 15% improvement. The number of active listings for the same month also drop from 10,699 to 8,234 homes. You wonder why some homes received multiple offers? That's because supply is kinda lower.
The good news for buyers, especially first-time buyers, not only interest rates still low (under 5% in some cases), get $8,000 tax credit, but also YTD ave. sales dips 18.65% to $391,540. On the median side, it's down 13.72% from $413,500 to $356,750.
Based on the data extracted from MRIS below, the market reached bottom (maybe) in December-January period. From there, it sort of taking off.
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WASHINGTON DC
DC market is very interesting because 1) yes, average sales median declined and 2) home sales started to tick up. However, unlike No. Va, don't think it hasn't reached bottom yet since properties stay longer on the market. Days on the market went from 77 days to 92 days.
The total number of homes sold in April up 13.32% from 368 to 417 homes while average sales declined 11.2% to $517,845 and median also declined 11% to $389,900. This basically tells you that lower priced homes drag down higher prices.
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If we put DC and N. Va side-by-side, you see the difference. DC need some more price correction before it sees a turnaround.
HOUSING INVENTORY
This is where am going against the grain. MRIS, NVAR are using calculation based on the number of active listings divided by number of homes sold, which in essence it shows that inventories are lower.
When we included pending sales (under contract, contract) into the equation, inventory level changed dramatically.
For example. According to NVAR April 2009 report, inventory level is at 5.33 months, which is a sellers' market. But if we include pending home sales (technically these homes haven't gone to closing yet - so it's not sold) back into the formula inventory is at 8.98 months, a buyer's market. Personally, I think there's probability that contracts could fall apart, ask any listing agent. The reason: financing.
Sure we want to see quick turnaround. But, think we're not there yet. There are still homes out there not selling, taken off the market, etc. For argument sake, let's put inventory levels between 5.33 months to 8.98 months for an average of 7.16 months.
DC inventory level is at 9 months (strong buyer's market), this is using the same formula that MRIS and NVAR uses. You can imagine what the true level of inventory, absorption rate, if we add back the pending sales. DC has a long way to go before it reaches bottom.
For buyers, what you need to know is this formula.
