Normally in July we’re talking about the summer slowdown, but this year the slowdown has to do with the lack of inventory, not a lack of buyers. It’s truly dramatic, and very frustrating for buyers.
Check out these numbers:
Northern Virginia: 1.75 months of inventory
Arlington: 1.57 months of inventory
DC: 2.29 months of inventory
A balanced market has six months of inventory! As a point of reference, in August 2005—the peak of the peak of the housing bubble—we had 1.6 months of inventory in Northern Virginia. These are scary numbers, folks!
The “turnaround” is old news at this point: CNN Money notes that prices have risen and “the worst is over.” The WSJ announced “Housing Passes a Milestone” and that the numbers are convincing. The WSJ article does note that shadow inventory of foreclosures creates a certain risk to the recovery, but RBI’s mid year distressed inventory report for the DC area reports that distressed sales in our area are down 22% from last year. With such low inventory rates here in DC, we are begging for some of this “shadow inventory” to be released, if it exists!
What’s driving the buyers? Still low interest rates, with every week driving to new record lows. How long will this keep up? Investors are out in droves. In the District in the past 30 days, 132 of 689 closed transactions—that’s 19%!!—were ALL CASH. No wonder “regular” buyers are frustrated—they can’t compete!
If you know someone looking to move, please contact us. And if you’re thinking of selling, we’ll be happy to provide you with a free market analysis of your home and review of statistics in your local neighborhood.