Recent Trends in the Real Estate Market

Absorption Rate

The absorption rate has remained flat since April of this year. From April to August the absorption rate averaged 18.5%. We experienced higher absorption rates during the Spring/Summer of 2009 than we had in the past three Spring/Summers (2006, 2007, and 2008). This is an early indication that the local real estate marketing is moving towards a balanced market. I expect to see demand actually pick up as more buyers try to purchase properties before the end of the year to take advantage of the tax credit. There will continue to be increase in inventory too, so we’ll have to see if this increase in inventory offsets the increase in demand and keeps the absorption rates in the 16% - 18% range.

Days on Market

The average time to sell a home dipped slightly again last month (1%). It still takes about three months to sell a property in the current market. I expect to see an increase in the in the days on market due to the anticipated number of short sale (pre-foreclosure) homes sold this year. These transactions may take months to close and therefore may increase the overall average days to sale homes for the area.

Sales Price

The average sales prices in the region remained about same last month (.36% decrease).

Arlington County ($537,120; 2.63% increase)

Fairfax County ($449,086; .28% increase)

Baltimore County ($273,214; 2.11% decrease)

Montgomery County ($456,860; .52% decrease)

Prince Georges County ($231,549; .78% increase)

Washington D.C. ($466,336; 3.55% decrease)

I expect to see property values to remain relatively flat for the entire 2009 year!

Number of Sales

The number of sales decreased last month (about 11.1%). Although the number of sales in our area has decreased recently, we are selling more homes on average every month compared to the monthly averages last year. I now expect to see the number of sales slow, but remain relatively high for the fall/winter seasons.

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This week we are interviewing Brad Cohen of Mason Dixon Funding, Inc. Listen to Brad explain the recent trends in the mortgage industry and how to best prepare for your next home purchase. This is an informal and informative interview.

Enjoy the show.

For additional information or questions contact either of us.