GMU’s Lisa A. Sturtevant writes an occasional column analyzing local housing data.
Compared with a year ago, March sales in the Washington metropolitan area increased 9.9 percent, while average prices rose 9.7 percent.
The year-over-year price appreciation in March is a continuation of a 16-month trend of price growth in the metropolitan area. Year-over-year average prices were up 12.7 percent for single-family detached houses, 9.8 percent for townhouses and 6.7 percent for condominiums. The March data can provide an early indication of the strength of the housing market going into the rest of the year.
Sales activity tends to be much brisker in March than in February, and this year is no exception, with the number of sales in the metropolitan area increasing by 33.4 percent between February and March, an increase that is in line with the 10-year average increase. (Home sales data are from MRIS, the region’s multiple listing service.) Sales were up in March over February in all 22 jurisdictions in the Washington metropolitan area.
However, compared with last year, the February-to-March uptick was lower in the District and in Fairfax County and the independent cities of Fairfax, Falls Church and Alexandria. The relatively slower sales in March in these jurisdictions can be at least partially explained by the very low inventories; potential buyers have little to choose from in these locations.
The composition of sales this March is a little different from last year. Condo sales have been particularly strong in the beginning of the spring. Condo sales accounted for a greater share of March 2013 sales compared with March 2012 sales in nearly all jurisdictions.
For example, in Arlington County, condos comprised 54.5 percent of sales in March 2013, up from 44.3 percent of sales in March 2012. The condo share in Prince George’s County was 15.4 percent in March 2013, up from 10 percent the previous year. Townhouses were also in demand, but single-family detached homes accounted for a smaller share of March 2013 sales compared with March 2012 sales.
Signs from the early spring housing market indicate that we’re seeing the typical warm weather uptick in the regional housing market. According to the March employment numbers for the Washington DC metropolitan area (available from the GMU Center for Regional Analysis) sequestration has not yet had an effect on the economy and it appears as though the cutbacks have also not impacted the local housing market as of March.
However, furloughs are just beginning and hiring freezes in the public and private sectors may become more common. If job growth in the region slows, so too will the demand for housing.
While the region’s housing market will continue to improve, lackluster job growth could mean that the double-digit price and sales growth we’ve seen over the past year could slow through the spring and into summer and fall.
Lisa A. Sturtevant is deputy director of the Center for Regional Analysis at George Mason University.