Although the Washington metro area is fortunate to be pulling out of the housing slump ahead of the rest of the country, challenges remain. Prices have begun rising in some jurisdictions, but not all of them. Sales are improving, but buyers remain skittish.
Keeping a close eye on sales and inventory figures will help buyers and sellers gauge the market climate so they know who has the upper hand.
I don’t mean to use “upper hand” in a negative sense here, but the truth is, in most real estate transactions, either the buyer or seller has an advantage.
It doesn’t necessarily mean someone will “take advantage” of you, but it is helpful to know whether buyers or sellers are negotiating from a relatively strong or weak position.
When the market is flooded with homes and no one seems interested in buying them, buyers have an advantage. They can ask for price reductions, financing help and various contingencies - and frequently get them.
These days, sellers are beginning to get the upper hand in many transactions. In most of the Washington area, buyers are paying a higher percentage of the asking price than they were in 2008 and 2009. Today’s charts show why.
The first thing to notice is how much the inventory has fallen. Take Prince George’s County, for example. February’s inventory was much lower than it was in 2008 and 2009, which means sellers don’t face as much competition as they did then.
The second thing to look at is sales. It doesn’t matter whether inventory has fallen if sales fall in the same proportion. Instead, sales have climbed steadily in Prince George’s since 2008.
As a result of these two factors, Prince George’s County is now a much better market for sellers than it was two to three years ago.
That said, Fairfax County is an even better market for sellers. Notice how much smaller the inventory is in Fairfax compared to Prince George’s. Then compare the two counties on the sales chart.
Because Fairfax buyers have been competing more fiercely with one another, prices have been rising there. Prices in Prince George’s County have not recovered in the same way because buyers still have an edge there.
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