For years I have kept a record of the market stats. I have tried to keep my summaries simple. I look at the 3 major categories of housing: single family detached, townhomes and condos. Through different market cycles, they move in different directions. I also pay attention to days on market, inventory levels and the percentage of sale price to list price.
For a more thorough analysis, I would recommend clicking on the Real Estate Business Intelligence link under the Market Stats tab above. There you can not only look at a variety of charts and graphs but can drill down to very specific sub markets including zip codes.
The chart below gives you a good overview of how 2011 compared to 2010. The numbers reflect activity in Fairfax County, Arlington County and the cities of Alexandria, Falls Church and Fairfax.
| Detached | Townhome | Condo | |
| Units Sold 2011/% chg | 7642 –9.5% | 4616 -12.9% | 4445 -13.6% |
| Units Sold 2010/ | 8440 | 5298 | 5143 |
| Avg Price 2011/ % chg | 641,662 +1.6% | 409,279 +3.7% | 277,885 0% |
| Avg Price 2010 | 631,832 | 394,814 | 277,756 |
| # Homes for Sale 12/31/11 | 1794 -1.7% | 588 -23.0% | 803 – 30.1% |
| # Homes for Sale 12/31/10 | 1825 | 764 | 1148 |
PRICES
Condos only increased by a few dollars but the other categories were nicely positive. Overall, prices increased 2.75%.
While not a scientific study, I have noticed a different appreciation rate and activity rate at different points in the market cycle among the 3 types of housing. The assumption here is that buyers would like to buy as big a home as possible. Many buyers between the townhome and detached market would prefer a detached home. And those fluctuating between a condo and townhome would prefer a townhome. Of course, there are many buyers with a lifestyle that fits perfectly with a condo. (empty nesters moving down, those who travel frequently, etc.) And a good number of buyers never want to do yard work. They just want a luxury townhome. But a large number of buyers want as much home as they can get.
So, when prices have appreciated rapidly, detached homes, the most expensive category of the 3, get out of the reach of many buyers and they fall back to townhomes. And the townhomes get too expensive for buyers who then opt for a condo. (In 2004 when prices were getting quite high, condos appreciated 28.9% for the year and detached homes were at 20.1%. In 2005, the numbers were 24.4% for condos and 19.8% for detached homes. )
Conversely, when prices have pulled back, some first timers will bypass condos since they can afford a townhome. And some townhome buyers realize they can afford a single family. I think that is where we are now. Look at the prices of detached and townhomes which are stronger than condos.
A caution here – don’t think that detached homes appreciate better than condos. Over a period of a few years, everything equals out. The market as a whole will go up and down the same amount. It is like flock of geese flying south in a V. Different birds take the lead at different times but they all arrive at their destination at the same time.
INVENTORY
This continues to be the story. For every month from February thru December the inventory was less in 2011 than in 2010. The fall off was greater than 10% for September thru December.
Interest rates remain historically low. My sense is that buyers will start to reenter the market this year. Reports of appreciating prices will spark many to act now. With limited inventory, more buyers in the market will mean multiple contract offers and prices rising a bit more. I am not – repeat not – suggesting we will be back to the crazy days of 2004 but buyers + no homes to buy = multiple offers.
SALES ACTIVITY AND MARKETING TIME
Note that number of units sold was off in all 3 categories. And here, just as suggested above in the price section, it shows the greatest drop in activity was the condo market. Second was townhomes and the smallest decrease was in detached homes. I believe this is another indicator that prices have bottomed.
Average marketing time for a home in December was 69 days compared to 66 days a year ago. This number seems off to me. I have observed that properly priced and properly presented homes sell much quicker than that. Of course there are homes that linger on the market since they are overpriced or need too much work for the price asked. So, in total, the average days on market is 2 months but that should be beatable with proper marketing.
The average sales price to the original list price was 95.2% in December 2011 compared to 94.9% in December 2010.
Overall, I think the 2012 market will be robust with above average price appreciation and, at least in the early part of the year, buyers will be fighting over limited inventory. Hopefully, this will spark a few more sellers to jump in and even things out a bit.
Whatever happens, I am here to discuss your situation and strategize the best way to approach the market.
As always feel free to call or email with any real estate questions.
Photo credit: digitalart
