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Regional Spotlight: Washington, D.C. Metro Area Sees Largest Pending Home Sales Increase in a Decade

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RISMEDIA, March 11, 2011—According to data released by RealEstate Business Intelligence (RBI), an MRIS company, the Washington, D.C. metro area housing market showed the largest year-over-year increase in pending home sales although housing prices remained weak.

“There was a 33% year-over-year increase in the number of contracts signed in February 2011, the largest increase in more than a decade,” says housing market expert and RBI analyst Jonathan Miller. “The number of signed contracts remains 13.7 percent below the 10 year average but activity has begun to expand. Unusually restrictive mortgage lending conditions continue to keep housing prices in check.”

To track the local housing market, the RBI Pending Home Sales Index (Washington, D.C. Metro Area) offers a two-year moving window on the housing market using pending sales and median sold price. The results include new pending sales for each month through and including February 2011. The market area includes: Washington, D.C., Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City and Falls Church City.

“The RBI Pending Home Sales Index provides unique insight into the state of the current housing market by measuring the number of signed contracts through the most recent month, the only metric currently available that does this,” says Miller. “The median sales price, which has an advantage over average sales price because it removes outliers, is provided to show the relationship between signed contract activity and prices.”

Based on the figures released by RBI, Miller dissects the volatility between home prices and pending sales in the Washington, D.C. Metro area. According to Miller:

Pending home sales see largest year-over-year increase in more than a decade. There were 4,044 contracts signed in the month of February, up 33% from 3,041 contracts signed in the same period a year ago. However the pending sales total was 13.7% below the monthly average for the last ten years as tight credit conditions temper sales activity. The number of signed contracts increased since the beginning of the year, consistent with historic seasonal expectations.

Median sales price slips. The median sales price for the region declined 2.9% to $300,000 from $309,000 in February 2010, returning to the same level in February 2009, before the federal government stimulus for home buyers was initiated.

Active listings and the new listing subset edged higher over the year as sellers tested the market. There were 13,511 active listings in February, 3.6% more than in February 2010. New listings grew at a similar pace of 3.2% over the same period. The gain in pending sales more than offset the increase in active listings as measured by the absorption rate—the number of months to sell all active listings at the current pace of new pending sales activity. The rate was 3.3 months in February, down from 4.3 months in February 2010 and down from 6.5 months in February 2009.

Days on market expanded by nearly two weeks over the past year. The average home in the region that went to contract in February took 85 days to sell, nearly two weeks longer than the same period a year ago. Days on market averaged three and a half weeks faster than the same period two years ago, shortly after the credit crunch began at the end of 2008.

For more information, visit www.RBIntel.com.

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