February 28th, 2011, posted by Brandon
Do you find yourself scratching your head wondering how real estate prices can be “up” on Monday and “down” on Tuesday? I was listening to WTOP radio on Wednesday and they reported house prices fell in DC, then I read a piece in the Washington Business Journal saying prices are up! What gives?
The truth is, prices can be up and down at the same time – depending on how you look at the numbers. Are you comparing year over year, month over month, houses or condo, city or suburbs? Dive deeper into the source of the data to really understand what is happening with the prices in your neighborhood.
I think the best DC and Montgomery County stats can be found on GCAAR.com and in most areas of the country, the local association keeps excellent statistical data for everyone to see on their web site. Take a look at these two links.
Notice at the bottom right the average price of condos and coops took a steep dive in the last 12 months – and average prices for single family houses fell too. Yet, if you’re a buyer trying to buy something, you’ll find everything seems to be moving quickly, for full price! What gives?
Remember this – statistics reflect reality from the past with a gap of about 6 months or more. In the spring of 2010, right before the federal tax credit expired, we had a huge increase in transactional volume across the country, and in many areas, including DC, a mini bubble in pricing. Prices went up by as much as 5% in one month for many homes. As soon as the tax credit expired, much of the steam was gone and for the months following, the market returned to a very sluggish pace. The statistics are just now reflecting that mini bubble with an increase, then a dive.
The last several months have been tough on sellers, but that seems to be changing. Buyers are back, interest rates remain low, and sellable inventory is tight. The market seems to be finding its legs early this spring and I’m optimistic we can hold on to some ground moving through 2011. Unless of course interest rates shoot up – then all bets are off.
For more information about how this information impacts you, write me at firstname.lastname@example.org