Welcome to the first ever Insider Report for the Washington Metro area. This is your peek behind the scenes at what is really going on in the local real estate space — we’ll tell it like it is using on-the-ground insights backed up with cold hard stats from the industry’s most comprehensive database of broker- and owner-listed homes, as well as public records and our own brokerage activity. We hate sales mumbo jumbo as much as you do, so we’ll leave that part out. If you’d like to receive the report via email each month, just sign up!
Now, without further introduction, onto the numbers!
Scarcity seems to be the name of the game. We’re seeing very few new houses come onto the market, with an almost imperceptible increase of around 2%. The number of homes being sold is going down down down by a whopping 30 — 40% in almost all areas throughout the region.
The median price of homes is still on a gentle decline with the exception of the District dropping by almost 24%. With the recent bouts of foreclosure news, the lack of new listings on the market, and a general unease with the market most buyers seem to be on an emotional rollercoaster of initial hesitation, mixed with nerves throughout the process, and ending with a general feeling of apathy.
You won’t be finding a whole lot of new homes for sale in most counties. We see a spike in Alexandria, but that’s simply due to the previous month being depressed and the volume low enough that any change will affect the direction of inventory.
|County||Compared to August 2010||Compared to September 2009|
|District of Columbia||+2.0%||-14.6%|
|Fairfax City County||-6.0%||-11.3%|
|Prince George’s County||-0.8%||-12.4%|
|Prince William County||-1.6%||+3.7%|
Change in # of Houses for Sale on September 30th 2010
“With interest rates staying low and properties remaining on the market longer, buyers are not feeling a sense of urgency to get moving with the process,” said Kendell Walker, a Redfin agent in Northern Virginia. “My clients are very comfortable sitting on the sidelines and not jumping right into the game.”
“We are seeing a lot more buyers requesting second and third tours of the same house,” said Taylor Connolly, a Redfin agent in the Baltimore Metro Area. “The buyer feels no rush to put in an offer since homes are staying on the market longer and not getting as much attention as they used to.”
This type of wait and see attitude is not reassuring to someone who wants to sell their house, so sellers are waiting until buyers become a bit more active before jumping into the game.
Cold Feet and Second Thoughts
This is the month that saw the inevitable seasonal drop in sales volume. Every single area in the region was down by at least 20% — 30% over last month, while certain spots, like Alexandria, and the District were down by over 40%.
|County||Compared to August 2010||Compared to August 2010 Adjusted for # Weekdays||Compared to September 2009||Compared to September 2009 Adjusted for # Weekdays|
|District of Columbia||-44.5%||-44.5%||-28.3%||-28.3%|
|Fairfax City County||-40.0%||-40.0%||-33.3%||-33.3%|
|Prince George’s County||-29.0%||-29.0%||-41.2%||-41.2%|
|Prince William County||-30.3%||-30.3%||-37.8%||-37.8%|
Change in # of Houses That Sold in September 2010
So, where are all the buyers? According to Bryan Waters, a Redfin agent in Maryland, the buyers are out there, they are just getting a bad case of the nerves. Bryan said, “Last month I had two clients get contracts accepted and at that point in the process they got cold feet. Wondering, ‘Is this the right home for me? Did I pay too much?’ and then they cancelled the contracts.”
Scott Sabey, a Redfin agent in Fairfax and Alexandria, has seen a similar scenario unfold many times, “I’ve negotiated multiple offers that came in well under the list price. The buyers were thrilled. Until they won. Then they started second guessing the price they paid. They were worried that they paid too much, even though they didn’t end up paying what the sellers were asking.”
With this type of skittishness it’s no wonder we aren’t seeing a lot of action on the buying front.
The major movers, when it comes to the size-adjusted median price of homes, have been Arlington, Alexandria and the District. With the District dropping nearly 24%, Alexandria taking a hit of 15.7% and Arlington dipping down 10.8% the rest of the areas look pretty flat in comparison.
|County||Median Price in
|Median $/SqFt Change
since August 2010
|Median $/SqFt Change
since September 2009
|District of Columbia||$419,500||-23.7%||-2.1%|
|Fairfax City County||$495,000||-1.3%||+37.5%|
|Prince George’s County||$205,000||+2.5%||-12.8%|
|Prince William County||$330,000||-2.9%||+9.6%|
Change in Median Price of Houses That Sold in September 2010
“Over the past few months we’ve been seeing more sellers entertaining low offers,” said Karen Krupsaw, Redfin’s market manager for the Washington Metro Area. “In the recent past, most sellers would have completely ignored an offer that came in 10% below asking price, but now people are starting to entertain 10% and even 15% off list price, at least as a starting point.”
Marshall Park, a Redfin Agent in Arlington and Alexandria explains, “Buyers used to get extremely discouraged anytime they lost a bid on a house. These days they are much more apathetic in their attitude toward any particular home. The buyer figures if I can’t get this house for the price I want, then I’ll simply try again.”
Real Estate has always been full of emotions, but it seems like this roller coaster has been cranked up to 11.
Stay tuned next for next month’s newsletter where we’ll dive into what happened throughout the market in October and help you get a realistic view of what’s happening in your neighborhood.
Until then, buckle up and enjoy the ride.
Have something to say? Post your thoughts in the comments section below. Any lingering questions? Check out our methodology. Want to dive into the data yourself? Check out our spreadsheet full of information broken down by counties, cities, and neighborhoods.
Michelle Broderick, Redfin Analytics Team