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Serving the Business Needs of OUR Professionals
2012 January - February
Capital Area REALTOR®
DC Market Report By Fred Kendrick
The 2011 Washington, DC residential real estate market withstood uncertainty in the financial world, rigid credit guidelines, threats to the mortgage interest tax deduction and inventories of single-family homes, condominiums and cooperatives were at their lowest levels in six years. The end result was a 2% decline in sales from 2010, but with only 3.36 month supply of inventory at the end of Fred Kendrick 2011(compared to 6.2 months nationally) the DC real estate market remained one of the strongest in the country. Average and median prices were on the rise in 2011 (led by strong single-family sales), and with a healthy local and regional economy, the forecast is for continued growth in 2012 as we continue to struggle with a lack of inventory. The main obstacle to a more robust market in 2012 continues to be found in the mortgage industry. Tighter credit guidelines and higher down payment requirements are keeping many willing buyers on the sidelines. On the sellers’ side, many who purchased homes in and around 2005 still find themselves underwater (despite rising prices on the single-family side) and unable to sell without taking a loss. These obstacles are having the effect of keeping housing demand in check despite similar conditions during the boom of the mid-2000s (low rates and low inventory), which ironically is a positive effect for the market. Single-Family HOMES Sales of single-family homes in 2011 were down 3% from 2010, and 31% off the market high set in 2004, ending a two-year streak of yearover-year gains. The previous two years had seen end-of-year gains of 19% and 11% respectively. In 2011, the largest gains occurred in the upper brackets, with homes over $1.5 million up 15% over 2010. Sales of homes priced between $600,000 and $700,000 were up 13% and those priced from $800,000 to $900,000 up by 11%. This slight decline in sales after two years of positive movement is due almost entirely to the lack of inventory in the market. At the end of December, there were only 825 single-family homes available in the District of Columbia in the Metropolitan Regional Information System (MRIS), a 31% decline from the same point in 2010 and the lowest number of available homes since August of 2005. The effective inventory of 2.93 months at the end of December was typical of what was seen throughout the year. There was an average of 3.1 months of single-family inventory in 2010 without any month of the year exceeding four months of available inventory. At the end of the year, homes priced from $600,000 to $700,000 had an even lower effective inventory of 1.14 months, and homes priced between $800,000 and $1 million stood at 1.48 months. The demand for homes combined with the low inventory pushed single-family prices up in 2010, with average prices gaining 5% and median prices gaining 7% over 2010. This was the second consecutive year of price appreciation in this market after reaching the bottom in 2009. Note that despite the gains of the last two years, average prices are still 14% off the high average price point and 15% off the median high, both reached in 2007. Condominiums and Cooperatives Sales of condominiums and cooperatives remained virtually even from 2010 to 2011, with only a 0.4% decline. 2011 totals were off 6% from 2009 and off 36% from the high point set in 2005. For 2011, units priced under $150,000 were up by 43% over 2010, while units between $900,000 and $1 million were up 25%. The upper end of the condo/
Pay Your 2012 SentriLock Card Service Fees Your 2012 SentriLock Card Service fees are now due. SentriLock Card Service fees total $143.10 and are due February 23, 2012. SentriLock Card Services are available to members who have paid both SentriLock fees and 2012 REALTOR® Association dues. For your protection and security, SentriLock does not store your credit card data. Thus, they cannot automatically process your payment. You must pay via one of the methods listed below: 1. Login to the SentriLock website: http://lb.sentrilock.com and click on the “shopping cart” icon. This will allow you to securely pay online through their E-commerce network. 2. Next time you update your card via the card reader, click on the link provided. 3. Call their toll free number 1-877-EASY-606 (877-327-9606) to pay via telephone. Please have your SentriCard ready as you will need the number on it to make a telephone-based payment. Agents who have not paid Sentrilock fees by March 19, 2012 will have their SentriCard suspended and a reactivation fee of $50.00 plus tax will be added to the total amount due. Cards suspended can be immediately reactivated via payment to SentriLock, provided that all dues and fees to your primary REALTOR® Association are paid in full. If you have any questions, please contact SentriLock’s tech support department at 1-877-SENTRILOCK (877-736-8745).
Helpful Tips for Your SentriLock Batteries:
• Batteries placed in backwards, will void your warranty on your SentriLock box • Notify SentriLock when you replace batteries • Please pay attention to SentriLock e-mail alerts, especially ones notifying you when your SentriLock batteries are low • If you do not have an e-mail address on file with SentriLock, please contact GCAAR. SentriLock is the official lockbox provider of the National Association of REALTORS® and is also a proud partner of the REALTOR Benefits® Program.
co-op market fared the worst in 2011, with sales of units priced over $1 million down 18% from 2010. The inventory of available units at the end of December was 26% lower than a year ago and, like DC single-family homes, reached the lowest point seen in over six years. There was a noticeable decline in more affordable units in 2011 with 44% less available inventory under $200,000 by the end of the year. At the end of December there was 4.04 months of available condo/coop inventory, higher than the 2.93 months on the single-family side, but still technically a seller’s market. But with Urban Turf reporting 42 new condo projects in the pipeline for the upcoming year in the District, the market should change substantially by the end of 2012 with the strength and resilience of condo demand put to the test. Average and median prices of condominium and cooperative units each fell 2% from 2010 totals, but are only 3% off the top of the market reached in 2005. With new condo inventory typically at higher price points, it would not be surprising to see prices start to edge up rapidly in the second half of 2012 as these new units start to go to settlement.