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DC Home Prices Set Record In June As Inventory Creeps Back

by Mark Wellborn

DC Home Prices Set Record In June As Inventory Creeps Back: Figure 1

Home prices in the District of Columbia rose 16.3 percent between June 2012 and June 2013 to reach a median sales price of $529,000, the highest on record for the city, according to a report released by RealEstate Business Intelligence on Wednesday. The new price point shatters the previous record, set just last month, by almost $40,000.

The median sales price for the entire DC area also climbed to a new record ($440,000), a 10 percent increase versus a year ago and tying the highest level for the area set back in 2007.

Despite rising prices in the region, homes continue to sell at a frenzied pace.

The median number of days that listings spent on the market stood at nine in June for the second month in a row. To put that number in perspective, homes are now selling more than twice as fast as they were in June 2012.

However, the question that buyers out there really want an answer to is: Is there any relief coming for the historically low inventory that has plagued the market?

The answer is, sort of.

While the number of active listings remains historically low, new listings are surging, rising at a double-digit rate (+10.6%) for the third consecutive month. But as RBI’s Corey Hart explains, this doesn’t mean that supply is balancing out with demand.

“Hard to say if this three-month trend of double-digit gains will bring us out of the ‘inventory bottom’,” Hart told UrbanTurf. “Because these gains have been partially offset by three months of increased contract activity (+9.0% in April, +6% in May, +7% in June), the DC area continues to hover around two months of supply. The 8,281 active listings at the end of June are still 46.4 percent lower than the 10-year June average. But if potential sellers continue to come off the sidelines in the months ahead, due to the favorable conditions, and purchase activity eases, then we could see less of an inventory squeeze.”

Hart also pointed out that the current inventory levels remain above the chronically low levels experienced in 2004-2005 when there were stretches with less than one month of supply and some months had more sales recorded than there were active listings at month’s end.

Here are a few other interesting statistics from the report:

  • The average sales-to-original-list-price ratio reached 99.1 percent in June.
  • Closed home sales rose 12.3 percent between June 2012 and June 2013, the 15th consecutive month with a year-over-year gain.

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.

The thumbnail photo is of a house at 127 Quincy Street in Chevy Chase that recently went under contract. Photo by Maxwell MacKenzie.

This article originally published at https://dc.urbanturf.com/articles/blog/dc_home_prices_set_record_again_inventory_creeps_back/7297

3 Comments

  1. Vinh An Nguyen said at 4:20 pm on Wednesday July 10, 2013:
    The premise that one can have infinitely expanding home prices at rates double, triple or more that of growth in personal income in a given area is ludicrous.
  1. Hstfatest said at 11:11 pm on Thursday July 11, 2013:
    That's what this blog would have you think. But there's a serious fundamental problem here!
  1. anon said at 4:15 pm on Friday July 12, 2013:
    @Vinh I agree but DC is increasingly becoming a more desirable place to live every day and more people move here than leave now. The housing stock is limited so supply will continue to outstrip demand. Given that the DC area should be metro area for decades to come and with traffic being a major issue with a road infrastructure that is structurally constrained (ie. not changing ever), DC will become a moderately dense and vibrant city over time. I think DC will become the Manhattan for the area with the surrounding area being the NYC boroughs and NY/NJ suburbs. And given that, DC prices will continue to be way out of reach for many buyers. Buy now.

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