As fall approaches, there are a number of questions floating around about the DC area housing market. Will inventory continue to come online making it a buyer’s market? Will the slew of new apartments entering the rental market push rents down? Will mortgage rates head higher as experts have predicted?
With these questions in mind, each day this week UrbanTurf will be hearing the predictions and trends that local industry professionals believe will play out in the fall market.
Watch the Inventory
By David Versel, Senior Research Associate, George Mason University Center for Regional Analysis
In 2012 and 2013, the complaint among home buyers and real estate agents in the DC area was “there’s just not enough inventory out there.” The first seven months of 2014 have been a case of being careful what you wish for.
In each of the first seven months of 2014, the inventory of homes available for sale in the region increased sharply from 2013 levels. In July 2014, there were 29,025 homes listed for sale, up 23 percent from July 2013. The ratio of active inventory to homes sold in the preceding month is also up from last year. In July 2014 there were 4.1 homes listed for sale for each home sold during the month, up from a 3.1 listing-to-sale ratio in July 2013. While this is a far cry from the 10:1 ratio seen in July 2007, it is still cause for concern. A related concern is the flattening of sales prices. The median home sale price in July 2014 was $401,000, which was up less than two percent from the July 2013 level of $394,000.
The prospects for the region’s housing market for the rest of 2014 and into 2015 will be determined by the inventory trends over the next few months. If the ratio of inventory to sales continues to increase, sales price growth will remain modest at best. However, if the pace of sales picks up or inventory begins to diminish, prices should recover. Anyone interested in buying or selling homes in the region should closely monitor these indicators over the next six months.
This article originally published at http://dc.urbanturf.com/articles/blog/fall_predictions_watch_the_inventory/8949
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