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DC Experiencing a 7-Year Low in For-Sale Inventory

by UrbanTurf Staff

DC Experiencing a 7-Year Low in For-Sale Inventory: Figure 1
Click to enlarge.

If you have been on the hunt for a home recently and feel like there is less to choose from, you’d be right.

The inventory of homes for sale in the DC area in July reached its lowest point since August 2005, RealEstate Business Intelligence (RBI) reported this morning. The report stated that there were 9,650 active listings on the market at the end of last month, a 35.4 percent drop compared to a year ago. In addition to the low inventory, only 4,579 new homes were listed for sale in July, the lowest amount for that month “on record with metro-wide data available back to 1997.”

From the RBI report:

The shrinking inventory of homes for sale is having an impact on the market as evidenced by the lowest July-level median days-on-market since 2005 (23 days), and the highest July-level sale- to-list-price ratio since 2006 (96.3 percent). The low supply also indicates that many potential sellers may still be wary of their financial situations, and are more comfortable remaining in their current homes.

Jonathan Miller of real estate appraisers and consultants Miller Samuel points to low to negative equity as a possible reason for the low inventory.

“If you don’t have enough equity to trade up, then you simply don’t sell. This is happening across the US right now,” Miller told UrbanTurf. “In a strangely artificial end around, it may be how the housing market finally recovers. Goose prices up a bit, bringing up equity levels allowing them to refinance and sell over the next few years.”

In addition to low inventory, the report also noted the continued strength of the condo market, which posted year-over-year median price gains of 4.4 percent and a 12.7 percent increase in sales over July 2011. RBI pointed to escalating rents, easier financing and comparatively lower price for reasons as to the health of this market segment.

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.

See other articles related to: realestate business intelligence, mris, housing inventory

This article originally published at https://dc.urbanturf.com/articles/blog/dc_experiencing_a_7-year_low_in_for-sale_inventory/5889

4 Comments

  1. Susan Isaacs said at 5:21 pm on Friday August 10, 2012:
    Low inventory in the condo segment particularly is pushing sales and prices. I posted a report here: http://actvra.in/G9K
  1. Vanessa said at 5:34 pm on Friday August 10, 2012:
    I can relate - we started looking for homes last November, and just bought our house in July. We kept thinking that the inventory would go up but it really never did, so we expanded our search.
  1. Confused said at 6:43 pm on Friday August 10, 2012:
    I guess what I struggle to figure out is what happens when one or all of the following hit -- (1) rates go up, (2) new apartment inventory delivers at the end of the year, (3) the "fiscal cliff"/sequestration at the end of the year, which will immediately impact defense contractors. We are setting up for all three to hit together in a couple of months. This gross demand/supply imbalance, and their corresponding price increases, seems unsustainable.
  1. Misty Gent said at 2:19 am on Thursday August 16, 2012:
    I can totally feel you Vanessa, it took as five months in searching for our dream home that has reasonable price. Compared to last year the listing in the market is really low.

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