In June the median sales price of homes sold in the Washington area hit $400,000 for the first time in four years, with data showing a 5.3 percent increase over a year ago. But inventory numbers indicate potential sellers aren't buying into the improved market and appear content to stay put.
June marked the fifth consecutive month with higher pricing gains over last year, according to data from RealEstate Business Intelligence. Sales were 5.7 percent higher than last June, but were down by 9 percent when compared with May numbers.
Inventory remained in short supply with the number of new listings in June lower than any month dating back to 1997, when RBI began tracking the statistic. Inventory declined for the 16th consecutive month, helping to fuel upward pressure on prices. But it still wasn't enough to tempt sellers.
"There is still reluctance for some sellers to re-enter the market. We think that will change as prices are heading up, and this is exactly how markets adjust," said David Howell of McEnearney Associates in McLean.
Some move-up buyers still are locked in place because of a lack of equity in their current home -- but that could ease if prices continue to climb. Other homeowners still worry they could face significant losses on their current property.
"Sellers are still thinking that it won't be any fun to enter what they think is a buyers' market," said Donna Evers of Evers & Co. "They're afraid that they won't get a good price and are putting their lives on hold."
She said a look at comparable sales in the neighborhood could make some homeowners who are on the fence about selling "pleasantly surprised."
The RBI data showed Montgomery County led all areas in the region with an 8.4 percent increase in median sales price, from $381,000 in June of 2011 to $413,000 in 2012.
Prices in Fairfax City rose by 6.6 percent to $435,000 and experienced the second-highest percentage gain. In Washington, prices rose by 4.6 percent over last year to $455,000. All areas saw increases in median sales prices except Falls Church, which had a decline of 7 percent to $612,000 compared with last June.