Buyers and Sellers Face-Off (November Insider)

Redfin’s monthly Washington & Baltimore Metro Area real estate insider report draws from our proprietary database of information on homes for sale and that just sold, along with insight from our agents to get a sense of what’s going on in the market right now. If you’d like to receive the report via email, just sign up.

Happy Holidays Redfinnians!

Here at Redfin, we just launched a big upgrade to the website this week that allows folks to log-in using their Facebook account. We also give our own customers an online Deal Room for tracking the escrow process and — tell your friends! — we opened the Dallas market. Plus, we upgraded our iPhone app to include the ability to run saved searches. For all the detail on the market, read on!

Inventory is down and sales are slow. The one bright spot is prices with many areas showing stabilization and price increases anywhere between 1% and 17%.

All areas have experienced a decline in inventory–one that is typical of this time of year. Compared to last year, however, inventory is mostly higher. But remember, at this time last year, the marketplace was energized by the first-time home buyer’s tax credit and its November expiration. The large increase in inventory in Alexandria is due to more condominiums on the market than this time last year and can fluctuate dramatically if a large hi-rise is put on the market.

Good Houses are Hard to Find

County Compared to October 2010 Compared to November 2009
Washington Area
Alexandria -11.3% +22.8%
Arlington County -14.7% -0.5%
District of Columbia -6.2% +3.9%
Fairfax City County -9.2% -1.3%
Fairfax County -15.6% +0.8%
Loudoun County -12.8% +9.3%
Montgomery County -11.3% +4.7%
Prince George’s County -3.3% -3.3%
Prince William County -10.2% +4.9%
Baltimore Area
Anne Arundel County -7.8% -1.8%
Baltimore City County -2.0% -0.5%
Baltimore County -5.8% +11.3%
Howard County -9.2% +9.6%

Change in # of Homes (SFH, condos, townhouses) for Sale on November 30th 2010

With fewer homes for sale, consumers get excited when a well-priced listing comes on the market. Kendell Walker, an agent in Prince William and Fairfax says, “I have serious buyers with closing deadlines and they’re just not finding what they want. Then when they find it, it’s a competitive situation. They’re very frustrated.” Similarly in Montgomery County, Nick Chaconas says, “You can’t wait three days when a house that is priced right comes on the market. One of my buyers was very disappointed that it was gone by the time they made their decision.”

Season Puts Skids on Sales

Sales are dramatically slower than this time last year, mostly due to the tax credit which inflated sales last year. But, sales have declined since October in all areas except Alexandria, a trend that is indicative of winter.

In Baltimore, the standoff between buyer and seller is even more weighted to the buyer’s side with inventory higher in Baltimore and Howard Counties relative to this time last year. “Buyers are on the sidelines waiting to pull the trigger,” says Taylor Connolly, an agent in the Baltimore region. “Sales have slowed although prices are inching up or staying flat. I think this is very significant if we see similar numbers in December,” adds Taylor. The next few months will let us know if this a fluke or a bona fide trend.

County Compared to Oct. 2010 Compared to Oct. 2010 Adjusted for # Weekdays Compared to November 2009 Compared to November 2009 Adjusted for # Weekdays
Washington Area
Alexandria +8.4% +3.5% -13.0% -17.0%
Arlington County -18.6% -22.3% -42.8% -45.4%
District of Columbia -21.2% -24.7% -38.6% -41.4%
Fairfax City County -4.5% -8.9% -38.2% -41.0%
Fairfax County -12.8% -16.8% -34.4% -37.4%
Loudoun County -11.4% -15.5% -30.0% -33.2%
Montgomery County -16.4% -20.2% -32.4% -35.5%
Prince George’s County -32.6% -35.6% -44.8% -47.3%
Prince William County -11.5% -15.5% -44.2% -46.8%
Baltimore Area
Anne Arundel County -28.9% -32.1% -40.3% -43.0%
Baltimore City County -22.4% -25.9% -17.1% -20.8%
Baltimore County -15.2% -19.0% -47.2% -49.6%
Howard County -21.2% -24.8% -43.4% -46.0%

Change in # of Homes (SFH, condos, townhouses) That Sold in November 2010

A Bright Spot in Prices

Prices continue to stabilize or increase in all areas except Anne Arundel and Baltimore City. The closer in areas including DC, Montgomery and Fairfax Counties are all experiencing substantial price increases.

In the inner core regions of DC, Alexandria and close-in Montgomery, price stability and low inventory have shifted the tide on well priced homes to the seller’s advantage. “We’re still seeing very competitive scenarios,” reports Fernando Ferrufino, an agent in DC. “However, in the suburbs, it’s a well-matched battle with sellers pricing their homes 5% above their expected sales price and buyers still making very low offers.” Kendell Walker sees clearly that, “there are some serious buyers out there and when the house is priced right, they’re ready to pounce.”

County Median Price* in
November 2010
Median Price Change
since Oct. 2010
Median Price Change
since November 2009
Washington Area
Alexandria $429,820 +4.8% +8.0%
Arlington County $518,197 +2.2% +11.8%
District of Columbia $469,370 +1.2% +21.9%
Fairfax City County $394,500 +10.3% +21.1%
Fairfax County $406,758 +6.1% +10.7%
Loudoun County $412,974 +9.0% +14.5%
Montgomery County $392,606 +17.6% +18.5%
Prince George’s County $185,713 -7.1% -14.3%
Prince William County $271,700 +4.9% +11.0%
Baltimore Area
Anne Arundel County $289,491 -7.0% -1.4%
Baltimore City County $79,026 -6.5% -29.8%
Baltimore County $228,599 +4.8% +2.0%
Howard County $368,260 -1.7% +5.3%

Change in Median Price of Homes That Sold in November 2010
*Median Price represents a weighted average of the individual median prices for single-family homes, condos, and townhouses. See our spreadsheet for individual breakdowns.

This increase in price has not yet trickled down to the conscious of most buyers.

Even when sellers acquiesce on their price, buyers are looking for more. “At home inspections, buyers continue to test the seller’s resolve,” says Bryan Waters, an agent in Maryland. “They’re jabbing away, nickel and diming for home repairs, seemingly with amnesia about what they did to the seller on price negotiation. And buyers aren’t afraid to walk away,” says Nick Chaconas. “For a small amount, they’ll cut off their nose to spite their face.” But with the dramatic decline in sales in most areas since last year, it’s no wonder the buyers feel they’re in the driver’s seat.

Bryan has noticed that the recent uptick in interest rates has created urgency for some buyers. “Recently the increase in rates affected the qualification of one of my buyers, causing him to back out of the contract. But when the seller heard, he reduced his price to our original offer price and the sale moved forward,” says Bryan.

Maybe next month, we’ll see a fairer fight between buyers and sellers but I wouldn’t expect any big hugs and kisses this holiday season.

That’s it for the last Washington Metro Area report of 2010! Want to dig into the raw data? Just download our spreadsheet. Questions or comments? Just post ‘em below! Thanks as always for your Redfin support, and happy solstice!

Best,
Karen Krupsaw
Redfin Washington & Baltimore Metro Market Manager

  • SBR

    “The one bright spot is prices with many areas showing stabilization and price increases anywhere between 1% and 17%. “

    For goodness sakes, can we please get away from this idea that increases in house prices is a good thing? Do we think that increases in the price of gas, bread, theater tickets is a good thing?

    I am an owner-occupier, and by any sensible metric of diversification I am overly invested in metro DC real estate. Price increases, then, to some extent would increase a measure of my financial wealth. However, I am also a parent who is concerned about how his children are going to able to afford a house of their own. (Maybe I do not like the prospect of them living at home forever!) I cannot see that house prices at unusually high multiples of income are a good thing. Only when house prices revert back to prices that people can reasonably afford, based on their incomes, can we expect to get to a stable housing market, which, I think, would be a good thing for our general economic well being. It seems to me, we will only reach such a stable level when there has been a further decline in prices relative to incomes in the metro DC area. (Though possibly not in AZ, FL, TX, NV).

    • Bobcatbob

      As a young adult looking to purchase something fairly priced on my “average” salary and get out of my parents' house… I agree with you 100%.

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  • KBoxD

    We share the same frustration about buying a home in Montgomery County. Even with a decent home, when we were willing to do 20% down with contigency but sellers were reluctant to meet us halfway which is only $10k apart from my offer and seller's price. Are they waiting for a price increase? Are they hoping that I will give in? It has been 3 weeks since my last offer. Any comments?

    • bookworm81

      Have you considered that they can't afford to accept your offer? It's possible that doing so would require that they bring money to the table that they just don't have.

  • RAW

    SBR: Your comment is right on…nothing really to add because you said it perfectly.

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    Inventory is down and sales are slow. The one bright spot is prices with many areas showing stabilization and price increases anywhere betwee evden eve nakliyat

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