In February, the DC area had the largest year-over-year increase for pending sales of existing homes in a decade, according data released recently by RealEstate Business Intelligence (RBI), the research arm of Metropolitan Regional Information Systems (MRIS).
Specifically, 4,044 homes went under contract in the area last month, a 33 percent increase over February 2010 (3,041 contracts). The area that MRIS analyzes includes DC, Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City.
While the increased sales activity is positive news, the median price across the area dropped year-over-year, which seems to go against area home price data that has come out in recent months. We spoke with housing market expert and RBI analyst Jonathan Miller to better understand why this might be.
Miller explained that while the data reported about pending sales in the area came from homes that went under contract in February, the median sales price data comes from homes that went to contract two to three months ago.
February home sales data for DC. Courtesy of MRIS.
“There is traditionally a seasonal dip in prices at the end of the year,” Miller explained, adding that the drop in price is not because of an increase in bank-owned properties that have gone under contract.
It is also important to point out that the drop in median sales price is for the entire region that the MRIS covers, an area much larger than just DC. In DC proper, the median price actually jumped year-over-year from $335,000 to $360,000.
While the increase in number of contracts signed is certainly an optimistic sign for the spring housing market, Miller noted that it is not an indicator that the area is on the verge of another real estate boom circa 2005.
“Up 33 percent is impressive, but it really means that we are leaving a weaker market and moving back into a more normal market.”
This article originally published at http://dc.urbanturf.com/articles/blog/a_closer_look_at_the_february_home_sales_surge_in_dc/3137
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