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DC's 8-Year Housing Inventory Drought
Earlier this month, DC's regional housing multiple listing service Bright MLS provided a stark, if not familiar, view about the region's for-sale housing inventory.
The active supply of homes in December was 5,489 listings, down 18 percent compared to last year and the lowest level for the region in a decade. The inventory fell in almost every jurisdiction by double digit percentages.
This is not a new trend. The lack of homes for sale in the city and greater metro area has been an ongoing issue for eight years and only seems to be getting worse.
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As UrbanTurf has noted over the years, the standard benchmark for a balanced housing market is a six-month supply of homes for sale. What that means is that if no new homes hit the market, the current supply of homes for sale would run out in six months.
The last time DC had a six-month supply of homes for sale was July 2009; inventory hasn't been above three months since July 2012. The new normal for the city is closer to a two-month supply, which the city has hovered around for years.
The DC region has been on a similar trajectory, as the chart above illustrates. In addition to less homes hitting the market, buyer demand is also a factor. The contract ratio for DC, the total number of homes under contract in a given period compared to the overall number of active listings, has regularly been above 1.0 in recent years, meaning that there has generally been a buyer for an active listing on the market.
With the spring market around the corner, it will be interesting to see how the supply and demand dynamics play out.
Thumbnail image courtesy of Ted Eytan.
See other articles related to: dc area housing market, dc area housing supply, dc housing inventory, housing inventory
This article originally published at https://dc.urbanturf.com/articles/blog/dcs-8-year-housing-inventory-drought/16387.
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