My story last week on the D.C. area housing market generated a lot of interest, especially from residents of Fairfax City. Several of them e-mailed me wanting to know why their city was the only place that showed both a year-over-year and year-to-date decline.
According to the report compiled by RealEstate Business Intelligence, a subsidiary of MRIS, the median sale price of homes in Fairfax City dropped to $392,500 last month from $443,750 in March 2012, an 11.5 percent decline. Year to date, the median sale price of homes in Fairfax City has fallen to $405,000 in 2013 from $417,000 in 2012, a 2.9 percent decline.
What is interesting to note is that the median sale price for homes in Fairfax County has increased during this same time period. The median sale price in Fairfax County was $430,000 last month, up from $398,500 in March 2012, a 7.9 percent increase. Year to date, the median sale price for homes in Fairfax County is up 13.3 percent, to $425,000 last month from $375,000 in 2012.
As many readers pointed out, this is a median sale price, which means if a lot of homes were sold in the lower end of the price range (or the higher end) it would affect the median price. Falls Church City, for example, showed a huge median price increase (37.7 percent) but that was because it had only 16 sales and most of them were at the high end.
For this reason, one real estate agent I spoke to, Lindsay Reishman, principal broker and owner of Lindsay Reishman Real Estate, said he doesn’t put much stock in median price changes. Instead, he prefers to look at the S&P/Case-Shiller Home Price Index, which tracks the changing value of home prices by looking at what the home sold for previously and what it sold for today. (It does not look at condos or co-ops, only single-family homes.)
Critics of Case-Shiller point out that its data lag significantly behind and are not as useful. For example, the most recent Case-Shiller report, which came out at the end of March, was for January.
A closer look at the data for Fairfax City didn’t reveal anything significant. For example, there weren’t any more distressed sales — which typically drags prices down — last month compared to March 2012. Out of the 28 sales in Fairfax City last month, six were short sales. In March 2012, six of the 32 sales were short sales.
Because March was the first month with a year-over-year decline in Fairfax City since August 2012, it doesn’t appear yet there is a trend developing here. Fairfax City still seems to be very much a seller’s market. Median days on market in March was five days, compared to 68 days in March 2012.