D.C. Market Update - If this isn’t a buyers’ market, what is?
The engine of inventory growth is steaming ahead as the sparkplug of strong sales starts to sputter. Predictably, the apartment situation is far bleaker than that of single-family homes.
The number of new listings surged by 34.6 percent, rising no less than 12.5 percent to as much as 200 percent at every price level from May of last year. Most of the apartments put on the market during the month were clustered between $200,000 and $500,000, with 261 of the 762 new listings between $300,000 and $500,000. By the end of the month, there were 274.6 percent more condos and co-ops still seeking buyers, a total 1,418 and easily more than in any month of the previous 12. The $200,000-300,000 level had the biggest increase, 182.2 percent, to 126, followed by $600,000-700,000, up 170.4 percent, to 146. In fact, triple-digit increases characterized each price level between $200,000 and $900,000.
The volume of sales plunged 25.6 percent versus May 2005, with double-digit declines at every single price level but $200,000-300,000, which rose 129.2 percent, to 55. A total of 378 condos and co-ops had ratified contracts, slightly more than every month but March since July. For the year to date, sales activity was off 15.8 percent, shrinking from 1,990 in 2005 to 1,676 last month. At the three levels between $400,000 and $700,000, declines were 22.6 percent to 25.2 percent. At $1 million to $1.25 million, there was a 60.9 percent decrease in volume, no change at $1.25 million to $1.5 million and a 57.1 percent reduction above $1.5 million. The absorption rate was a pallid 19 percent.
As for prices, they predictably have continued to fall, from an average of $426.576 last year to $411,836 this year and a median of $375,000 last year to $360,000.
Homes added to the market during May represented a 23 percent increase over the same month last year, rising to 801. There were gains in the large majority of all price points, mostly in the double digits. Exceptions were: below $200,000, which had strong double-digit declines; at $400,000-500,000, down 4.5 percent; at $500,000-600,000, up 8.6 percent; and at $900,000-$1 million, unchanged. The biggest category of new listings was $300,000-400,000, up 21.9 percent to 128. By the end of the month, 1,418 homes languished on the market, 119.8 percent more than in May of last year, reaching at least a 12-month peak. Between $200,000 and $900,000, gains were in the triple digits as high as 182.2 percent ($200,000-300,000, to 127).
Sales volume slumped 26.6 percent, thanks to declines in the double digits at every price point below $1 million, except for $700,000-800,000, which was 9.3 percent lower than May of 2005. Above $1 million, 64 homes went under contract in contrast to 52 a year earlier. In all, 406 properties found buyers. But the month’s sales activity was about even with every month since July, except for the winter months, which lagged. For the year to date, sales sank 19.1 percent, to 1,863, with every single price point but one posting declines. The exception was 15.5 percent growth, to 67, for homes offered between $1 million and $1.25 million. The absorption rate was 22.3 percent.
The average price of a home has edged down from $628,179 to $627,547, and the median has slipped from $488,000 to $475,000.
There is no mystery in the numbers. They speak of a buyers’ market caused by blossoming inventory, shriveling sales and interest rates that are relatively robust in comparison with recent years. Certainly, as they always have over time, single-family homes are proving to have held their value more reliably than have apartments. Condos and co-ops are demonstrating their vulnerability in a changing market and their risk as investments. But for folks who can afford to enter the market only by purchasing an apartment, a co-op or condominium remains a desirable alternative to renting. Look for further softening of the market as a whole, but there continues to be not a scintilla of evidence that some vaunted bubble is about to burst. It’s not going to happen.
Condos and co-ops
The number of new listings surged by 34.6 percent, rising no less than 12.5 percent to as much as 200 percent at every price level from May of last year. Most of the apartments put on the market during the month were clustered between $200,000 and $500,000, with 261 of the 762 new listings between $300,000 and $500,000. By the end of the month, there were 274.6 percent more condos and co-ops still seeking buyers, a total 1,418 and easily more than in any month of the previous 12. The $200,000-300,000 level had the biggest increase, 182.2 percent, to 126, followed by $600,000-700,000, up 170.4 percent, to 146. In fact, triple-digit increases characterized each price level between $200,000 and $900,000.
The volume of sales plunged 25.6 percent versus May 2005, with double-digit declines at every single price level but $200,000-300,000, which rose 129.2 percent, to 55. A total of 378 condos and co-ops had ratified contracts, slightly more than every month but March since July. For the year to date, sales activity was off 15.8 percent, shrinking from 1,990 in 2005 to 1,676 last month. At the three levels between $400,000 and $700,000, declines were 22.6 percent to 25.2 percent. At $1 million to $1.25 million, there was a 60.9 percent decrease in volume, no change at $1.25 million to $1.5 million and a 57.1 percent reduction above $1.5 million. The absorption rate was a pallid 19 percent.
As for prices, they predictably have continued to fall, from an average of $426.576 last year to $411,836 this year and a median of $375,000 last year to $360,000.
Single-family homes
Homes added to the market during May represented a 23 percent increase over the same month last year, rising to 801. There were gains in the large majority of all price points, mostly in the double digits. Exceptions were: below $200,000, which had strong double-digit declines; at $400,000-500,000, down 4.5 percent; at $500,000-600,000, up 8.6 percent; and at $900,000-$1 million, unchanged. The biggest category of new listings was $300,000-400,000, up 21.9 percent to 128. By the end of the month, 1,418 homes languished on the market, 119.8 percent more than in May of last year, reaching at least a 12-month peak. Between $200,000 and $900,000, gains were in the triple digits as high as 182.2 percent ($200,000-300,000, to 127).
Sales volume slumped 26.6 percent, thanks to declines in the double digits at every price point below $1 million, except for $700,000-800,000, which was 9.3 percent lower than May of 2005. Above $1 million, 64 homes went under contract in contrast to 52 a year earlier. In all, 406 properties found buyers. But the month’s sales activity was about even with every month since July, except for the winter months, which lagged. For the year to date, sales sank 19.1 percent, to 1,863, with every single price point but one posting declines. The exception was 15.5 percent growth, to 67, for homes offered between $1 million and $1.25 million. The absorption rate was 22.3 percent.
The average price of a home has edged down from $628,179 to $627,547, and the median has slipped from $488,000 to $475,000.
What it all means
There is no mystery in the numbers. They speak of a buyers’ market caused by blossoming inventory, shriveling sales and interest rates that are relatively robust in comparison with recent years. Certainly, as they always have over time, single-family homes are proving to have held their value more reliably than have apartments. Condos and co-ops are demonstrating their vulnerability in a changing market and their risk as investments. But for folks who can afford to enter the market only by purchasing an apartment, a co-op or condominium remains a desirable alternative to renting. Look for further softening of the market as a whole, but there continues to be not a scintilla of evidence that some vaunted bubble is about to burst. It’s not going to happen.
posted by Service You Can Trust Team at
5:41 AM
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