Washington D.C.'s Housing Inventory Keeps Going Down - Like many other housing markets around the country, the inventory of homes for sale in Washington D.C. keeps shrinking. And, when you consider how small the District is to begin with, there’s very little for sale right now!
The ironic thing here is that consumer confidence continues to rise, so more prospective buyers are looking to make a purchase, but homeowners remain apprehensive to list their properties!
According to recently released data, there is a shortage of all types of homes for sale in the nation's capital. In fact, the Center for Regional Analysis at George Mason University says inventory last month was at an eight-year low.
Overall, new listings in the D.C. metro area increased from December to January, but that's typical in all housing markets as we begin to transition from the colder winter months to the milder spring season. But when you analyze the year-to-year numbers, that's when you realize how few homes are on the market today in Washington, D.C. The number of single-family homes on the market plummeted by 36% from January 2012 to January 2013. Right now, the number is as low as it’s been in over 15 years.
Condominium listings fell by 43% during the same time period, and townhomes for sale are even harder to find, with the lowest proportion of listings on record.
Because of the short supply, the median sales price in the D.C. metro area of all homes continues to rise, posting gains for the fourth consecutive month. And on a year-to-year comparison, it's up 5% from January 2012 to January 2013. Townhomes saw the largest median sales growth, up 13.3% in the same time period. And despite the higher prices, condos are also a hot commodity. The number of pending new contracts for condominium purchases increased 10% in January.
So, with these conditions – which clearly indicate a seller's market – why are homeowners still cautious about listing their properties?
Experts say several factors could be at play, including some situations where the homeowner wants to sell the home, but can't.
Like most other metropolitan areas around the nation, D.C. saw home prices spike in the early 2000's before the economy and housing market collapsed in 2008. Many homeowners bought their current residence before the housing bubble burst, so they paid a lot more for the home then than what it's worth now. Therefore, many homeowners in the D.C. area are currently upside down on their mortgages, meaning they don't have enough equity in their homes at the current prices to sell the home.
And, even if they can afford to list the property and then sell it, the lack of inventory is affecting them as well.
Like other prospective buyers, homeowners who are looking to purchase another home are having a hard time finding a property that fits their needs. Since homeowners are struggling to find a new home that they like, they are simply choosing to remain in their current one.
So, the lack of inventory is creating a vicious cycle where no one wants to actually list their home for sale. But for those who do, economists say they can expect the properties to move quickly and to sell for prices well above what they would have gotten at this same time last year!
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