The typical summer slowdown in the Washington region’s housing market has been even more pronounced this year. With some exceptions in neighborhoods where homes continue to be snapped up quickly – such as Cabin John, Falls Church and Capitol Hill – buyers are staying away in droves.
Since the government shutdown in October, the number of homes sold has declined year-over-year in all but one month.
There were 414 fewer sales last month compared to July 2013, an 8.4 percent decrease, according to the latest data released Monday by RealEstate Business Intelligence, a subsidiary of MRIS.
While sales this time of year are often sluggish, this summer has been especially stagnate. Mortgage rates, which have been hovering at yearly lows for more than a month, haven’t spurred activity. Some potential buyers could be being kept away by the new tougher mortgage qualification standards. Uncertainty about the economy may have other buyers leery of making large purchases. And a number of homeowners who refinanced when rates were at historic lows are staying put.
The continued decline in pending sales – homes that are under contract but the deals have not closed – indicate that activity won’t be picking up anytime soon. The number of new contracts has declined year-over-year for the past eight months. Last month, there were 240 fewer contracts, a 4.8 percent decline compared to July 2013.
The slowdown in sales is putting downward pressure on home prices. Although the median price for the Washington region last month, $428,000, rose from July 2013, it was only a slight gain of 0.7 percent or $3,000.
The slight growth in median price was fueled by condominiums and townhouses. The median price of a condo was up $10,000 compared to July 2013, while the median price of a townhouse was up $19,000 compared to July 2013. The median price of a single-family detached home, however, fell by $6,750 compared to July 2013.
Looking at specific jurisdictions, Alexandria showed the biggest gain in median price last month, rising to $530,000 last month from $484,905 in July 2013. Fairfax City had the biggest drop in median price last month, falling to $442,500 from $487,500 in July 2013.
A lack of inventory has played a role in the listless housing market. Fewer options mean fewer sales. Buyers aren’t buying for the sake of buying a home. They are being picky and waiting until they find what they want.
But after months of low inventory, homes are steadily coming on the market. The number of homes for sale last month increased to 11,199, up from 8,391 in July 2013 and the highest level for any month in nearly three years. Yet, despite 10 consecutive months of year-over-year increases, active listings are 56.8 percent below the 2007 peak.