Summer…Here We Come! (June 2011 Insider Report)

Redfin’s monthly Washington 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.

Greetings Redfinnians!

The DC market is still feeling the effects of low inventory. Buyers are getting antsy from the limited selection, and when new homes do pop up, everyone pounces at once. Sellers who have been on the market since Spring are frustrated and confused as to why their homes haven’t sold.

How Low Can We Go?

June inventory is mostly down from May (~2% to as much as 7%), and down quite a bit from a year ago.

County Compared to May 2011 Compared to June 2010
Washington Area
Alexandria -8.3% -12.5%
Arlington County -1.4% -12.2%
District of Columbia -4.0% -15.0%
Fairfax City +8.0% -7.8%
Fairfax County -0.5% -11.4%
Loudoun County +1.3% -7.3%
Montgomery County -2.0% -11.0%
Prince George’s County -6.9% -10.7%
Prince William County -6.7% -15.4%
Baltimore Area
Anne Arundel County -0.4% -8.0%
Baltimore City -2.5% -13.4%
Baltimore County -2.0% -3.6%
Howard County -0.6% -5.4%

Change in # of Homes (SFH, condos, townhouses) for Sale on June 30th 2011

While the inventory is low, Redfin agents are seeing offers, as well as stronger motivation among buyers. With school starting in a few months and people preparing for vacations, buyers are starting to hunker down and take a more aggressive approach.

“You can see a general downturn, but some houses that have been on the market for weeks are suddenly receiving offers now,” says NE Virginia agent Rob Wittman. “Competition still exists, but not at the level of last month; I think people’s vacations are getting in the way. I expect one more rush of stiffer competition this summer, probably around mid-July.”

SW Virginia agent Kendell Walker sees a similar market: “A lot of military and government households are moving in and out of the area. People in general are figuring that this is a good time to sell, as buyers want to get settled before school starts. We had a lot of sellers inquire about selling their homes after June 1st. In fact, I had two listings in June that sold within three days, both over a weekend.”

In the District, the market is still active and competitive. DC agent Fernando Ferrufino observes: “The low inventory has created more desperation for those active buyers; as soon as they see a home that meets some-to-most of their criteria, they jump on it and bid aggressively. Experienced listing agents are pricing their listings properly, so that they sell briskly and may even attract multiple offers, which is not uncommon in DC.”

Sales Up MOM, Down YOY

Sales grew from May to June, but fell between 10% and 30% compared to June of last year, which was the final month of the tax credit.

County Compared to May 2011 Compared to May 2011 Adjusted for # Weekdays Compared to June 2010 Compared to June 2010 Adjusted for # Weekdays
Washington Area
Alexandria -3.0% -3.0% -13.5% -13.5%
Arlington County +4.9% +4.9% -25.5% -25.5%
District of Columbia -1.1% -1.1% -16.4% -16.4%
Fairfax City +3.2% +3.2% -36.0% -36.0%
Fairfax County +9.5% +9.5% -17.9% -17.9%
Loudoun County +29.4% +29.4% -21.3% -21.3%
Montgomery County +10.7% +10.7% -26.2% -26.2%
Prince George’s County +2.5% +2.5% -29.9% -29.9%
Prince William County +8.8% +8.8% -20.2% -20.2%
Baltimore Area
Anne Arundel County +6.4% +6.4% -18.6% -18.6%
Baltimore City -14.6% -14.6% -25.4% -25.4%
Baltimore County +6.0% +6.0% -24.0% -24.0%
Howard County +34.3% +34.3% -31.5% -31.5%

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

Speaking of multiple buyers, many of our buyers were caught in multiple-offer situations in June. Even in a slow market, a property that shows well, is priced accordingly and sits in a desirable location is almost certain to have multiple bids.

In the District, those multiple bid-situations were the norm. “We’re still facing multiple offer situations in DC on close to 50% of the offers we submit for clients,” says Redfin DC Team Lead Brent Roberts.

DC agent Tom Lewis sees a very similar view, along with what may be an interesting strategic approach from listing agents: “We’re still seeing low inventory and abundant buyers. It also seems like listing agents are trying to push for multiple-offer situations by pricing properties low from the start.”

Kendell has seen similar pockets of frenzy in her area: “May was a bit of a lull, but as soon as June hit, the buyers were back and ready to go. With inventory so low and buyers targeting specific neighborhoods, good homes are getting jumped on quickly, and buyers are ready to get competitive with their offers.”

While sales are increasing, Fernando thinks we’re going to see a lull during the later summer months: “May and June felt like the busy months of yesteryear, but July is feeling sluggish. This will make for a slow August, but that’s not uncommon for late summer.”

Prices Creeping Up

Pricing in most areas are up slightly (~2% to 5%) both month-to-month and year-over-year.

County Median Price* in
June 2011
Median Price Change
since May 2011
Median Price Change
since June 2010
Washington Area
Alexandria $457,626 -2.1% +7.7%
Arlington County $541,002 -1.6% +4.7%
District of Columbia $484,980 +7.7% +11.3%
Fairfax City $370,984 -1.1% -1.6%
Fairfax County $440,816 +5.4% +3.5%
Loudoun County $441,163 +7.6% +6.8%
Montgomery County $385,461 +6.5% +0.8%
Prince George’s County $170,126 +7.6% -11.7%
Prince William County $291,787 +7.4% +3.1%
Baltimore Area
Anne Arundel County $291,389 -0.8% -7.9%
Baltimore City $87,137 -2.0% -22.9%
Baltimore County $204,937 +0.4% -10.9%
Howard County $385,228 +7.8% -2.0%

Change in Median Price of Homes That Sold in June 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.

Inventory is low, but the high demand is helping prices creep up; low inventory plus high demand equals multiple bids, and when multiple bids are prevalent, prices goes up. Buyers are following suit, increasing offer amounts and writing in much more aggressive terms.

“In neighborhoods like Capitol Hill or Mt. Pleasant, where there are a lot of buyers waiting for nice 3 or 4-bedroom row houses to come along, we see a lot of bidding wars,” says Brent. “There’s such a lack of supply and so much pent-up demand. The imbalance is definitely pushing prices up.”

Fernando agrees, and suggests an aggressive approach for buyers writing offers. He sees more and more purchase offers “removing financing, appraisal and inspection contingencies, and also including high earnest deposits (5% or higher) to appeal to the seller and beat out other buyers.”

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,
Marshall Park
Virginia Area Manager