Washington, DC Metro Area – April Signed Contracts Second Highest Since 2006
May 10, 2011
The following analysis of the Washington, D.C. Metro Area housing market has been prepared by housing market expert Jonathan Miller of Miller Samuel, based on the April 2011 RBI Pending Home Sales IndexTM released today:
OVERVIEW
April buyers and sellers in the Washington, D.C. metro area signed 5,170 purchase contracts, the second highest April since 2006. The total was second only to the April 2010 surge in activity related to the final days of the federal homebuyer tax credit. Pending sales in April fell to 5,170, 4.8% short of the heavy volume reached in March, partly a result of last month’s release of pent-up demand accumulated during the post-tax credit expiration lull in the second half of 2010. The April 2011 median sales price was $334,000, nominally below $335,000 reached in same month last year and 4.4% above $320,000 in March. The month over month increase was consistent with seasonal patterns.
KEY TRENDS
• Second highest pending sales for April since 2006. April 2011 saw 5,170 signed contracts, 15.9% less than the surge in pending sales a year ago in the closing days of the federal homebuyers tax credit. Although pending sales reached its second highest April since 2006, it was 4.8% below the 5,432 total signed contracts in March. The spring housing market was unable to sustain the burst in sales activity of the prior month largely viewed as a release of pent-up demand from the 2010 post-tax credit lull.
• Median sales price increased for the second consecutive month, consistent with seasonal expectations. Based on closed sales, the April median sales price was $334,000, 4.4% above the March median sales price of $320,000 and consistent with the 3.1% median March to April increase of the past decade. The median sales price for April was essentially unchanged from $335,000 in the same month last year as the tax credit-related surge in pending sales last winter and spring pushed prices higher.
• Active inventory remained similar to last year yet new listings fell sharply. Active inventory slipped a nominal 0.5% to 15,542, from 15,617 in April 2010 as pending sales were able to work off excess inventory. The amount of new inventory entering the market fell sharply by 17.6% from the same period last year, reflecting last year’s entry of listings to take advantage of the surge in tax credit-related demand. The March to April 3.3% increase in new listings and 9% increase in active inventory was consistent with seasonal patterns as sellers in April looked to take advantage of the most active selling season of the year.
• Days on market in April averaged 5 days faster than March but 16 days slower than one year ago. The average number of days from original list date to contract date for a property that closed in April was 78 days, 5 days faster than the 83 days in March but slower than 62 days in April of last year. The surge in new listings in early 2010 pushed this metric sharply lower since a larger portion of sales activity reflected listings that had been recently added. Listing discount, the percentage difference between the original list price and sales price, was 5.9%, slightly lower than the 6.2% average in March reflecting improved agreement between the buyer and seller on price.
• The monthly absorption rate edged higher due to decline in new pending sales activity. The monthly absorption rate—the number of months to sell all active inventory at the current pace of new pending sales— expanded to 3 months from 2.5 months in the same period last year. Although listing inventory remained stable over the period, the decline in new pending sales caused this indicator to weaken. However the comparison against the same period last year is a comparison against a period subjected to significant stimulus by the federal government that resulted in inflated signed contract activity.
