Against the backdrop of a depressed housing market and high mortgage rates nationally, sales of both existing and new houses in the Washington metropolitan area were surprisingly high during the first part of 1981.
In Northern Virginia, for instance, the Board of Realtors reported single-family homes resales totaled 6,180 during the first four months of this year, an increase of 3 percent over the 5,995 sold during the same period in 1980. More surprisingly, the average single-family home sold was worth $100,302 -- the highest figure ever and more than $10,000 above the average sale price in the same period in 1980. Nevertheless, resale volume declined considerably as compared to the same period in 1979, when 8,033 houses were sold at an average price of $76,513.
In Montgomery County, where high residential prices almost have been taken for granted during the past decade, appraiser Alfred Jarchow reported a 3 percent rise in average resale prices in the first quarter of 1981, "about equal to average gains over the six years since 1974." In the past year Montgomery resale prices increased an average of 8.9 percent.
Resales tabulated by the Montgomery County Board of Realtors totaled 1,972 in the first four months of this year, almost equal to the 2,108 sales worth $203 million during the same period in 1980. During the same quarter in 1979, however, sales totaled 3,423 units worth a total of $298.7 million -- a record in the county.
The Prince ygeorge's County Board of Realtors also reported residential resales during the first quarter of this year were slightly above those for 1980 but still well below those for the first four months of 1979. That county had single-family home resales of 1,595 units for a total of $111 million in the first four months of this year; the average price was $70,200.
Condominium-co-op sales in Prince George's during the same period totaled 225 for a total of $9 million; the average price was $41,000. While these figures exceeded 1980 levels, they still were significantly below the 2,459 single-home sales in 1979 worth a total of $142 million with an average price of just below $58,000. Condominium sales have held steady but the average price increased $5,000 from 1979 to 1980.
Resales in the District during the first quarter of this year totaled 180 at an average $125,000. The number of sales increased only slightly as compared to 1980 but the average price increased sharply from $99,212. Again, 1979 sales were considerably higher, with 336 units being sold at an average of $89,937.
Resale patterns throughout the area show total sales down in the past two years but average prices up appreciably. In reviewing the pattern of resale prices in Montgomery County, appraiser Alfred Jarchow said that "the annual rate of price gain has been in a declining trend since the summer of 1979, when it was running around 16 percent." He said that the rate of appreciation dropped to 12 1/2 percent by February 1980, and declined to 9 percent by July 1980. "It has held close to the 9 percent annual rate since that time," he added.
Wayne Lancaster, president of the Northern Virginia Board of Realtors and an executive with Panorama Realty, said that resales now are averaging about 8 percent to 10 percent higher annually. He said that the slowest resale market is for homes priced in the range of $145,000 to $180,000 -- the move-up market.
He added that many buyers of homes priced under $100,000 are using FHA or VA financing. Although the FHA-VA rate is currently at a record 15 1/2 percent and costs sellers at least 3 to 5 discount points, this long-term, fixed-rate mortgage is now sought after in a market in which conventional lenders are trying to sell borrower-buyers on some new form of adjustable or renegotiable rate pattern designed to keep pace with inflation.
Nationally, high interest rates and a slow economy brought down sales of existing houses to a five-year low in 1980, when only 2.8 million single houses were sold. That was a drop of 22 percent below the 1979 level of sales reported by the National Association of Realtors. The peak resale year, nationally, was 1978, when sales totaled 3.8 million.
New-home sales, which are tabulated in the Washington area by Housing Data Reports Inc., showed an increase of 23 percent in the first four months of this year for single-family dwellings and a 50 percent increase in the number of condominium or co-operative sales. The 1981 four-month total is considerably higher than the 1980 total and almost equal to that of 1979, when single-family house sales were higher but condo sales were lower.
Renay Regardie, president of HDR, pointed out that all the sale tabulations for new single-family houses and both new and converted condominium apartments are made on the basis of signed sales contracts -- which suffer an average 12 percent "kickout" rate before actual settlements are made.
"Considering that the move-up market (consisting of people selling one house to buy a larger one) has been depressed for about 18 months, these figures show that a lot of town and single houses have been selling in the range under $100,000 to first-time buyers, many of whom take advantage of below-market rates purchased by builders," Regardie added.
The emergence of the new or converted condominium/co-op dwelling in the area market is shown by statistics from Housing Data Reports. In the first four months of this year, condo sales amounted to 3,332 compared with 5,419 single-family or town house sales. In 1980, condo/co-op sales totaled only 2,218 in relation to 4,390 single-family or town house sales. In 1979, the condo proportion was considerably less -- totaling 2,797 in comparison to 6,197 single-family and town house sales.