There has been recent good news nationally in the housing market. In May, home sales were stronger than they have been since spring of 2010 when homebuyers were taking advantage of the federal homebuyer tax credit, and pending home sales were at their highest level in two years. While foreclosures continue to be a problem in some markets and mortgages can still be hard to get for those without very good credit, the national sales figures point to a housing market that is beginning to stand on its own. This is good news for local communities across the country as we head into the summer months.
Data for the Washington metropolitan area also continue to show improvement in the region’s housing market. Sales were up region-wide four out of the last five months and pending sales — which are generally an indicator of future final sales — are also up.
According to RBIntel, across the Washington metropolitan area (which includes the District and 22 counties and cities in Maryland, Virginia and West Virginia), there were nearly 6,700 homes sold in May, reflecting an increase of 14.8 percent over May 2011. The biggest increases in sales were in some of the region’s outer jurisdictions and in suburban Maryland, where the recovery has taken somewhat longer. For example, sales in Montgomery County were up 21.4 percent in May. In Loudoun County, sales were up 26.5 percent.
But sales are up just about everywhere in the region. In the city of Alexandria, there were 213 sales in May, up 7.6 percent from a year earlier. In Arlington County, sales were up 43.6 percent, driven by strong condo sales. In the core metropolitan area jurisdictions, only Prince George’s County saw a modest decline in sales compared to a year earlier. But prices were up for the first time in Prince George’s County in April, and the pending sales figures (below) are also positive for the county.
Pending sales are transactions that have gone under contract and are generally a good predictor of future final sales. The May pending sales figures are the total number of housing units with a signed contract in May. The number of pending sales is up in all of the metro area’s core jurisdictions. The biggest jump in contracts was in Prince George’s County, where there were 3,410 pending sales in May 2011, up 28.1 percent over May 2011.
Strong pending sales figures suggest continued positive sales activity. Declining inventories and strong price appreciation may characterize the summer season. Local markets that have been slow to recover — particularly Prince George’s County — seem poised for a strong bounce over the next few months.
Lisa A. Sturtevant is an assistant research professor at George Mason University’s Center for Regional Analysis.