Loudoun Market Watch: Housing Continues to Stabilize in September

September saw another month of steady demand pressures.  A market in equilibrium (in which there is enough supply to satisfy demand) typically has a month's supply of inventory in the four to five month range.  For the fourth consecutive month, Loudoun had a month's supply of inventory below four months.  There is probably not enough supply to satisfy increasing demand at this rate.  This was particularly evident in Sterling where all three Sterling zip codes posted a month's supply of inventory below three months again this month.  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.  The graph below shows how consistent this indicator has become since April.

For the third consecutive month, the average days on market indicator was in the 61 to 65 days range, again indicating market stability.  It was less than 90 days over the last six consecutive months. 

Following normal cyclical sales patterns, total unit sales declined for the third consecutive month - from 466 units in August to 435 units in September (-6.7%).  However, total annualized existing home sales continued to gain on 2008 figures; the negative difference declined from -8.9% in August to -8.2% in September. 

After reaching a low of $415,377 in February, the average close price for detached units averaged $501,154 in September, with monthly increases three out of the last six months.  In fact, compared to last September, the average detached close price increased 3% (+$14,000) while the average prices for attached units increased $27,000 (+10%).  Condominium prices continued to decline, -11% (-$19,000) over the year.

The median sales price remained steady at $340,000 in September, up 6.3% over this time last year.    September also marks the second consecutive month since January 2006 that the median in the current month exceeded the corresponding median in the previous year. 

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 September, the ratio exceeded 94% for the fourth consecutive month and the 2009 monthly average was more than two percentage points higher than the 2008 average.  This suggests sellers have adjusted their expectations to meet current market conditions.