Delta Associates Washington Area Housing Outlook: 2Q 2012

Delta Associates Washington Area Housing Outlook for 2nd quarter 2012 was released July 27.  By most measures, the Washington Metro Area housing market has consistently performed better than other metro areas’ housing markets. This is seen most clearly when examining longterm performance.

The for-sale housing market at mid-year 2012 in the Washington Metro Area appears to be in full recovery with record low inventory, prices and volume up over the past year at healthy paces, and days on market below the long-term average.

• 2nd quarter prices: Up 5.4% over the past year.
• Sales volume: Up 9.2% over the past year.
• Days on market: Down over the year to just 59 days in the 2nd quarter, and has dipped well below the long-term average of 78 days.
• Months of inventory: At current rates of sales velocity, inventory has declined dramatically in recent quarters. Months of inventory, at 2.3 months, is the lowest it has been since the boom days of 2005.

Core

District of Columbia, Alexandria, Arlington

In Core areas of DC, Alexandria, and Arlington average home prices are up 4.2% higher than 2nd quarter of 2011.  Days-on-market decreased to 53 days, from 68 days one year ago.

• District: the average price in the 2nd quarter of 2012 is 3.1% higher than one year earlier.
• Alexandria: the average sales price in the 2nd quarter is 0.3% higher than one year ago.
• Arlington: the average price is 7.9% higher than a year ago.

Inner Ring Suburbs

Fairfax, Montgomery, Prince Georges Counties

Home prices rose an average of 6.3% in the Inner Ring suburbs of Fairfax, Montgomery, and Prince Georges counties combined.  Average time on market fell to 61 days, down from 70 days one year ago.

• Fairfax: home prices are 2.3% higher than 2nd quarter 2011
• Montgomery: prices are 5.0% higher over the same period
• Prince Georges: home prices are 7.1% higher than a year ago

Washington Area

District, Alexandria, Arlington; Fairfax, Montgomery, Prince Georges Counties;

Loudoun, Prince William, Frederick Counties

Prices: In the Washington Area the average selling price in the 2nd quarter of 2012 is 98.1% of list price. This ratio is the highest it has been since the 3rd quarter of 2005, and is well above the recent trough of 89.9% in the 1st quarter of 2009.

Inventory: Inventory at the end of the 2nd quarter of 2012 is the lowest it has been since the 2nd quarter of 2005 – the peak of the last housing cycle. The Washington area has an average of 2.3 months of forsale inventory at the end of the 2nd quarter of 2012, down from 3.5 months of inventory one year ago. In recent years, the Washington area’s average prices tend to rise when the ratio of inventory to sales is below six months.

Sales Volume: Sales volume in the 2nd quarter of 2012 is up over the year, by 9.2%. This is a contrast to 2011 when the number of homes sold metro-wide was down 4.5% from 2010.

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Delta Associates is a firm of experienced professionals offering research, advisory, and valuation services to the real estate industry for over 30 years. The firm's Housing Outlook draws from a wide variety of sources including the Bureau of Labor Statistics, the Federal Housing Finance Agency, the National Association of Realtors, Standard & Poor's/Case-Shiller, and the U.S. Census.