Charting the market: Small rally hinted by sales, prices

November sales weren’t too shabby. About 6,000 existing homes were sold in the Washington metro area last month, a drop of 4 percent compared to November 2009.

Why is a drop of 4 percent “not too shabby?” Because a year ago the federal government was giving away thousands of dollars to folks to encourage them to buy homes. Last month, even without that incentive, area buyers still bought a decent number of homes.

Sales were significantly higher than they were in 2007 and 2008, another positive sign that should reassure us we aren’t falling back into the doldrums we saw in those years.

Still, total sales for the first 11 months of the year were just 83,000 - a 7 percent decline from 2009’s total of nearly 90,000.

But there’s another reassuring thing I see in November statistics: Home prices are holding steady or rising in most of the region. Median sales prices were up 18 percent in the District, 14 percent in Prince William County and 10 percent in Montgomery County.

That’s encouraging, because when the market slowed a few years ago, we watched home values take a nose dive. Now, sales are down, but prices are up. Buyers seem to recognize that many homes are a good value following the price declines of 2007 and 2008, and that is causing them to compete more than they did earlier.

For example, homes sold in Fairfax County in November 2008 went for 90 percent of the asking price, on average. In November 2010, it was 94 percent of the asking price.

I should note that even in the go-go years of 2004 and 2005, when prices were climbing rapidly, 98 percent of the asking price was a typical percentage in Fairfax. So rising from 90 percent in 2008 to 94 percent this year represents a significant increase in buyer competition, which is what fuels price increases.

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The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria, Va.; and the District.