Although the Washington-area housing market is not as active as it was in the spring, sellers in most jurisdictions found August was still a good month for them. Sellers in some counties, however, have watched buyers regain the advantage.
Contracts were ratified on nearly 7,000 existing homes last month, 3,000 fewer than we saw in March - the busiest month of the year. Of course, sales always are highest in the spring.
What’s more important for our purposes is the ratio of sales to unsold inventory. If inventory fell at the same rate as sales from March to August, then sellers would maintain the competitive edge over buyers they had in March. Sales chances were 35 percent then.
Inventory, however, continued to climb until June, while home sales fell. You can see this in today’s charts.
As a result, sales chances in the Washington region were 27 percent in August. That’s the same figure as July because both sales and inventory fell from July to August.
Sales chances are calculated by dividing a month’s sales figures by the inventory on the last day of the month, resulting in a percentage. A figure below 20 percent indicates a buyer’s market. Higher figures mean we’re in a balanced market or a seller’s market.
Where will things go from here? Sales and inventory should continue to decrease through December. Sales often fall faster than inventory, so I expect sales chances will drop further.
I am encouraged, however, by the relatively small number of listings that came on the market in August. Area Realtors listed 16 percent fewer homes than they did in August 2010.
Listings were down 40 percent compared to August 2007. That is a particularly encouraging comparison, because sales were a lot lower in 2007 than they are now.
This is my point: 2007 was a terrible year because the number of sales was far too small to deal with the flood of home listings. Sales chances in August 2007 were just 10 percent.
We’re in much better shape now because sales are up and inventory is down. That’s why chances have climbed to 27 percent.
Send email to csicks@gmail.com.
Please read our comment policy before commenting.