A home in AU Park.
The chronically low inventory of homes for sale in the city has been the theme of the DC housing market for months, maybe years. Since late 2015, the supply of homes for sale in the city has been below two months; a balanced housing market has at least a six-month supply of homes for sale.
However, the lack of homes for sale is particularly acute in five neighborhoods around the city.
The metric that monitors housing inventory in DC is months of supply. This measure calculates how many months it would take for all the current homes for sale in a given market to sell, given the sales pace in that section of DC. For example, in Mount Pleasant and LeDroit Park there is approximately a one month supply of active homes for sale. In Bloomingdale and Trinidad, the supply of active listings drops to 24 days. In the northern section of Cleveland Park, the supply sits at just over two weeks, and if no more homes were to come on the market in American University Park, the current inventory would be gone in 11 days.
Inventory only tells one side of the story for the housing markets in these neighborhoods. The other side is told by sales pace. The contract ratio compares the total number of homes under contract in a given period to the overall number of active listings. In Trinidad and LeDroit Park, the ratio for the month of May sat just above 2.0, which means that two homes went under contract during the month for every active listing. In Bloomingdale, the ratio was 3.0, and in North Cleveland Park it came in around 4.5. Nothing comes close to the competition in AU Park, however, where for every active listing in May, six homes found buyers.
The prospect of more inventory hitting the market to alleviate the crunch in these neighborhoods does not seem likely in the near term. In May, active listings in the DC region declined year-over-year to 11,072, the first time that inventory has dropped on an annual basis since September 2013.
This article originally published at http://dc.urbanturf.com/articles/blog/from_au_park_to_trinidad_a_look_at_how_tight_dcs_market/11415
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