The DC housing market has been characterized by two trends for the past couple years: chronically low inventory and high demand.
There were indications that the inventory trend, at least in the region, may have started to turn in March, but two charts for the first quarter of the year show that in DC proper, things remain the same.
Inventory of homes for sale in DC.
The inventory of homes for sale in DC remains quite low. In March, inventory stood at 1.8 months, despite increasing from last year. Inventory was even lower in January and February, dropping to 1.5 months of supply in December. The standard benchmark for a balanced housing market is six months of inventory. DC has been below the two-month level for six months.
Ratio of contracts to active listings.
The reason for the lack of inventory is illustrated in the second chart above. The ratio of contracts to listings on the market in DC has been above 1.0 for the last two months. This means that active listings are receiving at least one contract, and in many cases more. Just last week, a reader wrote in letting us know that he won a bidding war for his new Columbia Heights home — his offer was one of 16.
This article originally published at http://dc.urbanturf.com/articles/blog/the_two_charts_that_explain_the_dc_housing_market/11113
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