Real estate experts say there is some truth to talk that, despite a still-lagging economy, it’s become a seller’s market in parts of the metro area and bidding wars are again becoming the norm.
“We’re seeing lower inventory and multiple contract bidding wars in the District in the $500,000-to-$800,000 range,” said Stephen Israel, president of Buyer’s Edge Co. Inc. in Bethesda. He said he’s seen bidding wars in Bethesda as well as North Arlington in Virginia.
What accounts for this shift, Israel said, has to do with people taking advantage of the first-time buyer tax credits and purchasing properties in affordable categories inside and close to the District. This depleted the number of homes for sale now after the credit is gone.
Property availability and prices are also still being effected by the housing market crash.
“The D.C. metro area never felt the pain of other parts of the country with this recession because of our extraordinary employment base,” Israel said. “The pockets that felt the pain the worst were outside the Beltway.”
In parts of Prince George’s County and in Northern Virginia, he said prices have fallen 30 percent to 40 percent from what they were a few years ago. Some areas closer to the city saw prices drop only around 10 percent, though it is hard to get a sense of the market by comparing jurisdictions as different as Fairfax and Alexandria.
“Because some areas are much larger than others, raw numbers aren’t particularly useful,” explained Donald E. Tepper, a Realtor with Long & Foster in Burke. “One way to measure high inventory is by days on market — how long is the average property on the market? The smaller the number, the smaller the inventory.”
Tepper said real estate agents generally consider a market where homes are selling in 30 days or less to be a pretty strong market, whereas 60 days or longer is sluggish. If houses are on the market for more than 100 days, it’s a sign of a very weak market.
In May 2010, the average days on the market in the metro area was 75, according to data from Metropolitan Regional Information Systems Inc. Tepper said that’s more than a 30 percent improvement from a year earlier, when houses took an average 108 days to sell. The average days on the market for the whole second quarter was 56, and second-quarter data also showed home sales regionwide were up by almost 16 percent compared with the second quarter of 2009.
Right now, inventory tends to be lowest in midprice categories of $500,000 to $800,000 in areas inside the Beltway, with demand being fueled largely by lending practices.
“Financing drives inventory,” said Fred Kendrick, associate broker with TTR Sotheby’s International Realty in D.C. “What’s under that [Federal Housing Administration] limit of $729,000 does better.”
Inventory is highest for multifamily and high-end homes, and for houses outside the Beltway.
“Town houses and small single-family homes with prices of $500,000 to $800,000 are where all the action and competition is right now,” said Katie Wethman, a Realtor with the Wethman Group at Keller Williams Realty in McLean, “That’s where prices are rising, but thanks to amazingly low interest rates, buyers are able to meet the creep in price.”
A sampling of the market
Arlington County is seeing high demand for single-family detached homes in the $200,000-to-$399,999 price range, while at the same time experiencing minimal movement of condominiums. In fact, there are more condos on the market now than there were a year ago. The inventory of condos and other housing priced over $800,000 is high because it’s difficult to get financing.
Areas where homes linger on the market longest:
Fauquier County
Loudoun County
City of Alexandria (primarily condominiums)
Prince William County
Areas where homes are selling quickly:
City of Fairfax
Fairfax County (mainly single-family attached)
Prince William County (mainly single-family attached)
Where is inventory lowest?
City of Alexandria — single-family detached
Arlington County — single-family detached
Fairfax County — single-family attached and single-family detached
City of Falls Church — single-family attached
Loudoun County — single-family attached
D.C. — Capitol Hill, Mount Pleasant, Chevy Chase
Where is inventory highest?
Arlington County — condominiums
Fauquier County
Loudoun County
Potomac
Great Falls
McLean
