Housing markets in the Washington, D.C./Northern Virginia metro area have been among the first to recover from the prolonged recession. This area made another strong showing in May, according to the latest survey released on Monday by RealEstate BusinessIntelligence (RBI), the market research and analysis subsidiary of Metropolitan Regional Information Systems, which serves 40,000 real estate professionals in the Mid-Atlantic states.
The D.C. metro area closed 4,478 sales in May, 18.8% better than April closings and 14.3% above May 2011. The sale of detached homes—up 20.9% to 2,342 units—drove that growth. Condo sales were also strong, up 16.6% year-over-year to 1,062 units in May.
It’s no coincidence that this market’s closings reflect the diminishing impact of foreclosures on buyers’ decisions. In May, foreclosure sales in this market fell for the 25th consecutive month, and May’s 307 foreclosure sales were down 7.3% from May 2011. Active foreclosure listings fell by a jaw-dropping 69.5% compared to last year, and the inventory of short sales was 53.7% lower than in May 2011. Distressed properties accounted for just under 16% of all active listings in May, the lowest they’ve been since April 2009.
As foreclosure sales and availability have declined, the market’s median sales price rose for the fourth consecutive month. In May, the median price of $392,500 was up 11% over the same month a year ago. Price gains were extraordinary in Falls Church, Va., where the median price of $875,000 represented a 66.7% increase over the median in May 2011. Fairfax City was also strong, with an 18.5% jump.
Conversely, the median price for short sales decreased for the 16th consecutive month.
Perhaps the best news for this market is its current inventory of available for-sale homes. There were 10,510 active listings in May, the lowest number for that month since 2005. “As interest rates remain low and demand rises, the low supply will continue to put upward pressure on prices,” the report states. “This price growth could entice hesitant sellers to enter the market.” However, the report also cautions that the listings might also indicate that many people, worried about the economy’s future, are still comfortable remaining in their existing homes.
RBI also released its May analysis of the housing market in Greater Baltimore, where trendlines were similar to those in D.C.: closings in May were up 13% to 2,361 units, and prices rose by 7% to $237,500. Active listings fell by a whopping 25.8% to 12,683, and new listings were at their lowest levels since 1998. Active listings of foreclosures and short sales plummeted by 27.4% compared to May of 2011.
John Caulfield is senior editor for Builder magazine.