O Sellers, Where Art Thou? (Washington May 2011 Insider Report)

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Greetings Redfinnians!

Spring buyers have gobbled up all of the decent inventory, and we’re searching for a few good sellers to get things moving again. Since inventory is so limited, quality homes sell quickly and for a good price, which is actually pushing sale prices up compared to last month, as well as last year.

Inventory (Or a Lack Thereof)

The limited inventory is causing frustration for buyers throughout the metro area. We’re still seeing the largest shortages in counties that surround the District, such as Fairfax and Montgomery.

Why the drop in inventory? Part of the story may be the fact that we’re comparing apples to oranges; last year the federal tax credit brought out sellers who were hoping to capitalize on eager buyers, who were in turn lured into buying by the promise of all that tasty government dough. In short, we borrowed today’s buyers to purchase last year’s homes.

Which leads to our second factor contributing to low inventory; sellers don’t think they can get enough by selling now, when the market is cool. Rather than sell for a less-than-optimal price, many sellers have decided to sit on the sidelines and wait for brighter days. No buyers leads to no sellers leads to no buyers…someone call Joseph Heller.

County Compared to April 2011 Compared to May 2010
Washington Area
Alexandria 0.0% -4.2%
Arlington County -1.5% -12.8%
District of Columbia -1.0% -9.7%
Fairfax City +4.7% -19.1%
Fairfax County -1.1% -10.7%
Loudoun County -1.2% -7.7%
Montgomery County -1.1% -8.6%
Prince George’s County -4.3% -6.2%
Prince William County -3.7% -11.2%
Baltimore Area
Anne Arundel County +1.8% -3.9%
Baltimore City +0.4% -10.9%
Baltimore County +2.7% +1.1%
Howard County +2.1% -0.1%

Change in # of Homes (SFH, condos, townhouses) for Sale on May 31st 2011

Capping off the irony is the fact that buyers who do find good homes also find themselves in the middle of heated bidding wars against other buyers. Everyone’s fighting for the same scraps.

“I had one client that was looking in the Chevy Chase area and lost out on some houses due to an extremely competitive market,” recalls Redfin Montgomery agent Tom Lewis. “Driving the competition was a severe drought in supply. In some instances, people were waiving inspection, appraisal and financing contingencies. It felt like a tiny, isolated pocket of the 2006 market.”

Is it any wonder that buyers are going cuckoo for Cocoa Puffs?

Sales Pace? More Like Snail’s Pace, Amiright?

When it comes to hangovers, the Wolf Pack’s got nothing on our sales numbers. Again, last year’s tax credit deserves a big chunk o’ blame for this; people who would have bought this year already got their fill last year.

Some areas are bucking the trend; Fairfax City is up quite a bit from last month, and is showing a milder slide from this time last year, compared to the stomach-churning drop we’re seeing in other areas. The City of Baltimore is also looking relatively healthy. But still, ouch.

County Compared to Apr. 2011 Compared to Apr. 2011 Adjusted for # Weekdays Compared to May 2010 Compared to May 2010 Adjusted for # Weekdays
Washington Area
Alexandria +1.4% -3.2% -16.4% -20.2%
Arlington County -1.2% -5.7% -26.0% -29.4%
District of Columbia +3.0% -1.7% -20.2% -23.8%
Fairfax City +36.4% +30.2% -11.8% -15.8%
Fairfax County +6.3% +1.5% -21.9% -25.5%
Loudoun County -3.1% -7.6% -31.7% -34.8%
Montgomery County +1.4% -3.2% -24.4% -27.8%
Prince George’s County -4.6% -9.0% -25.2% -28.6%
Prince William County +4.2% -0.6% -19.8% -23.5%
Baltimore Area
Anne Arundel County -7.4% -11.6% -12.7% -16.7%
Baltimore City +10.3% +5.3% +3.2% -1.5%
Baltimore County +4.3% -0.4% -25.9% -29.3%
Howard County -4.1% -8.5% -34.3% -37.3%

Change in # of Homes (SFH, condos, townhouses) That Sold in May 2011

“Most tours in our area continue to be people who are new to the market,” says Virginia NE coordinator Anna Schwoerer. “But the sense of urgency we saw last year has pretty much evaporated. Buyers who were on the fence seem to be taking a break until the right opportunity arises.”

But again, when that opportunity does arise, buyers are ready to pounce. Despite the overall anemic market, a good home still sells for a good price.

Prices Are…Up?

Compared to last year and last month, prices are going up in many areas. But keep in mind that this increase is based on an overall smaller number of sold homes. They say a rising tide lifts all boats, but we don’t have very many boats in the water right now.

And to further strain the metaphor, not every boat in the water is getting lifted anyway. The District of Columbia is seeing a decent jump in prices, but Prince George’s County is down a little from last month and a lot from last year. Baltimore City is up a bunch from last month, but down a bunch from last year.

Struggling areas are still affected by high numbers of short sales and foreclosures, which are acting as a drag on prices.

County Median Price* in
May 2011
Median Price Change
since April 2011
Median Price Change
since May 2010
Washington Area
Alexandria $465,103 +9.2% +11.3%
Arlington County $541,988 +11.6% +13.4%
District of Columbia $459,339 +14.6% +17.3%
Fairfax City $380,250 +0.1% +9.2%
Fairfax County $422,999 +4.6% +5.4%
Loudoun County $407,050 +4.7% +2.4%
Montgomery County $361,687 +3.1% +0.7%
Prince George’s County $156,122 -0.3% -24.3%
Prince William County $271,386 +1.2% +1.8%
Baltimore Area
Anne Arundel County $296,271 +8.0% +5.5%
Baltimore City $88,101 +16.5% -21.8%
Baltimore County $203,177 +4.0% -6.4%
Howard County $357,349 -5.1% -3.8%

Change in Median Price of Homes That Sold in May 2011
*Median Price represents a weighted average of the individual median prices for single-family homes, condos, and townhouses. See our spreadsheet for individual breakdowns.

That’s the big picture. Want to know what’s happening in your neighborhood? Download our comprehensive spreadsheet and dig into the data for yourself! Inside you’ll find county, city, and neighborhood information galore. To learn more about how we calculate these numbers, check out our methodology page. You can also liven up the place by posting a comment below.

Best,
Taylor Connolly
Maryland Area Manager