The federal government shutdown didn’t take place until this month, but the D.C. area housing market was already starting to feel its effect in September, according to the latest data from RealEstate Business Intelligence.
Typically, activity picks up in the fall before the holiday season. However, the economic uncertainty swirling around the pending federal government standstill sent potential home buyers to the sidelines as they worried about being furloughed. The number of properties sold and the amount of pending sales last month slowed from August.
There were 3,651 sales in the D.C. metro area last month, down from 4,621 in August but 12.1 percent higher than September 2012. There were 4,260 homes under contract in September, down from 4,536 in August.
Those numbers will likely decline even further as a result of the shutdown, which is stalling home loans for many potential home buyers. An inability to contact either the IRS or the Social Security Administration for needed documents is hampering loan processing, which likely will cause a drag on home sales this month.
There were some encouraging signs when looking at the year-over-year numbers. Lack of inventory is driving median sales price higher. The D.C. metro area median sales price reached its highest level for the month of September in six years. At $387,000, it was up 7.5 percent compared to September 2012.
After months of freefall, inventory has begun to recover. Although the number of homes for sale remains at historic lows, more and more sellers are coming onto the market. There were 9,340 properties for sale last month, an increase of 12.5 percent from August. However, the number of homes for sale is nearly 30 percent below the five year average for the month of September.
Most of the listings are for condos and town houses. Active listings for single-family detached homes were at their lowest September level in eight years.
The number of new listings that came on the market last month was up 16.5 percent year-over-year, the sixth consecutive month of double-digit increases.
Because of the dearth of inventory and the fear that mortgage rates may be rising soon, homes are not lasting long on the market. The median-days-on market for the D.C. metro region was 17, the fewest days for a September since the housing boom in 2005.