Housing Inventory in DC Area Hits Lowest Level in Almost a Decade

• January 10, 2013
• 5 Comments

by UrbanTurf Staff

The DC area’s declining inventory.

The DC area finished 2012 with the lowest level of for-sale housing inventory in almost a decade, and the lowest number of new listings on record.

RealEstate Business Intelligence (RBI) reported this morning that there were 6,466 active listings in the region at the end of last year, a drop of over 4,200 listings from the end of 2011. As for new listings, 2,465 came on the market in December, the lowest number for any month with data dating back to 1997.

In general, a drop in inventory usually results in prices heading northward, but at least in the short term, RBI hypothesizes that is not what is happening:

Unseasonable declines in sales and median price from November could be an early sign of weakening demand. While intuitively low supply would put upward pressure on prices, it could be that many buyers are deciding to delay their home purchase until more options become available on the market, which is loosening the pressure on pricing as evidenced by the $11,000 drop in the median sale price from November.

Courtesy of RealEstate Business Intelligence

Still, there is evidence that the drop in inventory over the last 12 months has driven prices upward. In DC proper, the median sales price has risen almost 10 percent (from $414,000 to $455,000), and across the Metro area, prices rose 10.5 percent. During that period, active inventory fell by over 40 percent.

The area that RBI analyzes includes DC, Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City.

This article originally published at http://dc.urbanturf.com/articles/blog/housing_inventory_in_dc_area_hits_lowest_level_in_almost_a_decade/6501

5 Comments

1. Pete said at 12:13 pm on Thursday January 10, 2013:

   I’d be interested in knowing how many of the current listings are actually re-listings or long-term listings of places that can’t be sold for various reasons (e.g., quality, unrealistic pricing etc.) and whether the number of truly “market-aligned” listings is indeed a lot lower.

   I’m not surprised, given the amount of real estate activity that has been happening over the last few years, that listings have dropped so much - people want to hold on to what they’ve recently bought. I wonder what percentage of all housing stock, by neighborhood, has changed hands in the last five years. That would give a context to the stats above.

1. Jeff said at 12:31 pm on Thursday January 10, 2013:

   Demand must weaken - what happened in 2012 is simply unsustainable.  We’re reaching the outer limits of what today’s salaries can realistically sustain, especially at the low end, there’s boatloads of rental inventory hitting the market over the next 6 months, which should drive down rents making buying less attractive, and there’s also the risk of substantial federal cuts coming for the first time since the 80s.  To that end, Mike Allen posted the below preview from Sunday’s NYT Magazine in this morning’s Politico Playbook:

   FIRST LOOK - ANNIE LOWREY in N.Y. Times Magazine, “The Bucks Stopped Here: Over the last decade, Washington has been the great American boomtown, courtesy of the U.S. taxpayer. What happens when the government money drives up?” : “Increased government spending has bumped up the region’s human capital, drawing other businesses, from technology to medicine to hospitality. Restaurants and bars and yoga studios have cropped up to feed and clothe and stretch ... the population - which grew by 650,000 between 2000 and 2010. ... [But between the sequester and other Pentagon cuts,] The capital’s boom days ... might be over. ... It was not until the Bush years that [the] increasingly wealthy not-federal-but-still-government work force truly metastasized. The amorphous war on terror and the creation of the Department of Homeland Security - plus the wars in Afghanistan and Iraq - bloated the country’s spending by about $1 trillion.
   “The contracting dollars that were pumped into the local economy ... more than doubled between 2000 and 2010 ... This, in turn, created hundreds of thousands of desk jobs and fostered a sprawl of nameless, faceless office parks lining the roads out to Dulles Airport. In the process, tens of thousands of new workers, often well-paid young white-collar professionals in areas like technology, bioscience and engineering, also entered the local economy. And many of these young professionals ... worked 14-hour days and wanted to live near work, friends, coffee shops and yoga studios. This infusion of human capital, combined with proximity to the Federal tap, proved attractive to a huge number of other businesses looking to hire.” Posting shortly http://www.nytimes.com/pages/magazine/index.html

1. Caleb said at 3:46 pm on Thursday January 10, 2013:

   The one point that drives me crazy in the discussion of Washington DC home prices increasing, is the odd inability of those not from the region to realize that the housing prices, even as they rise in DC proper, are not out of whack with the prices of the suburban areas of the city in MD and VA. Housing has always been expensive outside of the district in a modern era. The reason DC was so cheap in comparison to Rockville or Manasas was the level of safety and weak government and management here in The District. I grew up in Howard County Maryland, one of the ten wealthiest counties in the US for decades, when DC was known as the ‘Murder Capitol’ of the world. Now that DC government has gotten much of its act together, DC is seen as a viable safer state to reside. You have children of the Baby Boomers choosing to forgoe manicured lawns of the suburbs for smaller housing in DC…still much of a shock to their suburban parents.

   It does not cost any less for me to purchase my 2br condo in Shaw as it would for me to purchase a 3-4br home in my hometown just 30miles north of the city where my mother and father commute from daily. This area has always been expensive and the DC government has finally gotten its act together and has started to attract people not only nationally, but locally away from MD and VA which it could not do 15-20yrs ago.

   Yes, we will feel a tightening of our belts and slowing of housing costs if there are sever federal cuts, but it won’t be the first time the region has had to obsorb fiscal cuts or a shutdown even.

1. C said at 11:32 am on Friday January 11, 2013:

   Could it be that fewer people are moving out of DC these days, so fewer are putting their houses on the market? And even if they do move, you can make so much money off renting these days that a lot of people are holding on to their properties and renting them out.

1. Doug Francis said at 9:50 pm on Monday January 14, 2013:

   I have to agree with Caleb that landlords are making a killing renting out their places. Nice places get multiple offers often over asking price because there just isn’t anything else available. Frankly, it’s insane.

   Same goes on the sales side as nice, new inventory gets absorbed immediately at a premium price thanks to multiple bidders.

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