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A Closer Look at the February Home Sales Surge in DC

by Mark Wellborn

A Closer Look at the February Home Sales Surge in DC: Figure 1

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.

A Closer Look at the February Home Sales Surge in DC: Figure 2
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

4 Comments

  1. Keith said at 4:52 am on Friday March 11, 2011:
    Why does the number of units sold (369) detailed in this table not jibe with the number sold (376) detailed in the Summary report provided by the very same people? Are there different definitions?
  1. Rob Ross said at 11:46 pm on Friday March 11, 2011:
    DC home sales are on fire. We are getting around 10-14 online loan applications a week for purchases in DC.
  1. Jonathan Miller said at 12:51 am on Saturday March 12, 2011:
    It's all about timing. The data is actually from the same source but its not static. In the time between the summary report generated for the web site and our pending sales report generated for the release, a few additional sales were captured. The difference is nominal and reflects the same trend and market conditions. Thanks for pointing this out!
  1. Ginny said at 8:57 pm on Monday March 14, 2011:
    Don't the year over year numbers also reflect the crazy snow we had last february -- I think that put a damper on some activity.

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