Loudoun Market Watch: Supply of Available Homes Continue to Decline

Again in August, demand pressures were on the rise.  A market in equilibrium (when there is enough supply to satisfy demand) typically has a month's supply of inventory in the four to five month range.  With only 3.6 months of available existing housing supply county-wide in August, there was not enough supply to satisfy increasing demand.  Loudoun's month's supply of inventory was below four months for the last three consecutive months.  This was particularly evident east of Leesburg where areas in Ashburn and all of Sterling posted a month's supply of inventory below three months.  A typical trend, the higher priced markets in Middleburg and Waterford had the highest month's supply of inventory based on characteristically low sales volume.

For the second consecutive month, the average days on market indicator was below 70 days (a phenomenon not seen since the housing boom in 2005) and was less than 90 days for the last five consecutive months.  It appears that there were fewer homes on the market in August and that listings were selling at an increasingly faster pace - strong indicators that market conditions are improving.

Total sales are expected to decline on a monthly basis in the second half of the year and August followed the normal, cyclical trend.  For the second consecutive month, total unit sales declined - from 490 units in July to 466 units in August.  However, total annualized existing home sales continued to gain on 2008 figures; the negative difference declined from 10.7% in July to 8.9% in August.  Also in August, condominium sales exceeded 20 units for the fourth consecutive month and the 2009 monthly average condominium sales figure was 5% higher than the 2008 average.

Although the median sales price declined $10,000 compared to July (for the first monthly decline this year) and albeit a small percentage increase, the August median sales price of $340,000 was 2% higher than the same figure in August 2008.  For the first time this year the median sales price exceeded the corresponding figure from the previous year.  Also for the first time this year, the average close prices for both detached and attached units exceeded the prices last year at this time.  Detached prices measured 4% higher (+$21,168) and attached prices advanced 6% by $16,538. 

The close price to original list price ratio is an indicator of either the willingness of sellers to negotiate price or their ability to price their homes to match current market conditions.  In August, the ratio exceeded 90% for the sixteenth consecutive month and the 2009 monthly average was almost two percentage points higher than the 2008 average.  This suggests sellers are pricing their homes more appropriately this year.

For a copy of the latest report, visit DAAR's Market Data and Trends. For questions on DAAR's housing market statistics contact Rosemary deButts, 540/338-2212, rosemarydebutts@verizon.net.

Courtesy of Rosemary deButts, DAAR Housing Market Consultant.