Home | Newsletter | Advertise
loading...

The Demand Metric That Keeps DC's Housing Inventory Low

  • March 21st 2017

by UrbanTurf Staff

✉️ Want to forward this article? Click here.

DC’s inventory of homes for sale sat at 1,176 active listings in February. That number of listings amounts to a mere 1.67 months of inventory, well below the six-month benchmark for a balanced market and a number that is in in keeping with the low-inventory trend that has plagued the city’s housing market for years.

While the number of new listings coming on the market each month directly affects the city’s inventory, a little known metric is an equally critical indicator of the supply of homes for sale in DC.

Contract ratio compares the total number of homes under contract in a given period to the overall number of active listings. A higher ratio signifies an increase in contracts compared to supply. For example, a ratio of 1.2 means there are 1.2 listings under contract for every listing that is active. For five of the last eight quarters, the contract ratio has been above 1.0 in DC, which means that during those quarters, more homes have sold than have come online. To put that in perspective, from 2007 to the beginning of 2012, the contract ratio in the city hovered around 0.5, and never rose above 1.0.

“The bottom line is that not enough sellers are putting their homes on the market to match demand and not enough builders are constructing homes to meet demand,” Jonathan Hill, VP of Marketing & Communications with MRIS, a Bright MLS told UrbanTurf.

Tomorrow, UrbanTurf will cover a new report that examines how much the inventory of homes for sale has dropped in the DC region over the last five years.

Similar Posts:

This article originally published at https://dc.urbanturf.com/articles/blog/the_homebuyer_demand_metric_that_keeps_dcs_housing_inventory_low/12355.

DC Real Estate Guides

Short guides to navigating the DC-area real estate market

We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Start browsing below!

First-Timer Primers

Intro guides for first-time home buyers

Red Flags Revealed During a Home Inspection Top 5 Tax Breaks For Homeowners Tax Relief for DC Homeowners
Condo Fee Tutorial What is a Rent Back? 10 Ways To Tell If a Home Renovation is Well Done
Obtaining a Basic Business License For Your Rental What is an Adjustable Rate Mortgage? The Splitting the Rent Formula
How Much Cash Do You Need to Buy a House? Is This Condo Building Financially Healthy? Interest Rates and Mortgage Points
The Scoop on Mortgage Insurance

Unique Spaces

Awesome and unusual real estate from across the DC Metro

The Most Intriguing Loft in DC The R Street Firehouse DC’s One-Room House
Dupont Circle’s Old Frat House To Become Alley Home Best Transition From a Garage To a Home The Roundhouse
Tilden Gardens Restaurant-Turned-Home Hits Market Next Week Logan Circle’s Most Intriguing Garage Frank Lloyd Wright Goes Green in Kensington
Sears Bungalow Gets a Modern Makeover Old Town General Store Becomes Three-Level Home Making the Most of a Skinny House
A Studio 27 Renovation on Capitol Hill Once a Carriage House, Now a Home The Bank that Became a Home
From Pie to Hooch to Heroin to Home The Live-Aboards of Gangplank Marina A Treehouse with Rock Creek Park As A Backyard
Modern Tranquility in Sperryville Saddle Up For Stable Living Throwing a Curve at 550 Square Feet
A Modern Hilltop Retreat Tilden Street Restaurant Becomes Spacious Home Focus on Design: A Vastu Unit at 22 West
The DC Area’s First Net Zero Home A Yankee Goes Green DC’s First Carbon Neutral Home
Eco-Friendly Alley House Off H Street The Gym, The Stables and The Firehouse