Would-be home buyers didn’t find much to choose from in January. Only 6,049 homes were available in the DC area on January 31, compared to 10,095 one year prior. Baltimore-area inventory was down to 9,386 from 12,191 last January.
January’s inventory was the smallest the region has seen since 2005. Back then, before the housing market became troubled, there was even less inventory. Eager buyers snatched up homes as they came on the market. The inventory couldn’t grow. Oh how quickly things can change.
You can see in the chart below that the inventory of unsold homes in the DC area tripled from January 2005 to January 2006. It nearly doubled in the Baltimore area. Inventory continued to rise until 2008 because listings were increasing while sales were falling.
When the inventory was high, sellers waited anxiously for buyers. These days, some buyers wait anxiously for sellers. Agents in popular markets have told me they can’t find properties to show their buyers.
Buyers who feel the pressure of lower inventory will act more quickly and pay more for the properties they want. Last year’s statistics prove it.
In Northern Virginia, eager buyers pushed 2012 average days-on-market stats down to 51 days compared to 60 in 2011. The median days-on-market reached as low as 14 days last May. The sales-price-to-list-price ratio was up 1 percent.
Buyers pushed prices even higher in some other jurisdictions last year. Sales prices were 1.7 percent higher than original list prices in Montgomery. They were 2.6 percent higher in DC, 4.4 percent in Prince George’s and 9 percent in Baltimore.
That’s one of the results of a smaller inventory, and it is the reason buyers must act swiftly and decisively when the right home comes on the market.
Source: Real Estate Business Intelligence (RBI), an MRIS company. Originally posted by Chris Sicks on February 27, 2013.