Real Estate Round-Up

Below is a reprint of City Influence's Market Trend Analysis for September 2009


This month's market trend analysis focuses on market activity in the Washington region as an indicator of market health. We looked at new listings, pending sales and closed sales from 2003 through the first six months of 2009. The number of sales that closed in July of 2009 was very close to, but slightly higher than, the number of sales closed in the beginning of 2003. The numbers were slightly on either side of 10,000 transactions.

The number of sales peaked toward the end of the second quarter of 2005 at over 20,000 transactions.

Analysis of the number of new listings provides a clear explanation of the market's surge in 2004 and 2005 and subsequent contraction in 2007 and 2008. The number of new listings available to be sold fell below the number of closed transactions at the end of 2003 and the beginning of 2004 and remained tight until the second quarter of 2005. This close supply/demand ratio produced higher prices and encouraged a dramatic increase in new supply by the third quarter of 2006.

The number of new listings peaked in June of 2006 at about 31,000 listings. So the increase in the number of new listings available for sale continued to increase for more than a year after the peak in the number of sales.

Currently, the number of new listings (18,000) is at about the same level we saw in the first quarter of 2004, as are the number of closed sales. The trend for new listings has been descending since that peak in 2006, but we are far from the low of 10,000 new listings that we saw in early 2003.

One more interesting point. The low number for closed transactions was reached twice during this period - in January of 2008 and in January of 2009, at 5,000 sales. The number of new listings in January 2008 (20,000) was four times the number of closed transactions (5,000), the largest gap in the studied time frame.

The trends are in the right direction for a stabilized market with prices appreciating at a rate within historic norms.

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