Loudoun Market Watch: Housing Continues Positive Gains

Pending listings, those that were marked contingent or contract during October, decreased 3.3% from September to 442 units.  Of those, 41 percent were short sales, 16 percent were foreclosures and 59 percent were non-distressed units.

The decline of active listings continues to plague Loudoun County's supply shortage.  Since January, the number of active listings has declined nine of the last ten months with the October total falling short of the January total by 54 percent.  This lack of available supply is fueling many of the other indicators affecting the Loudoun County housing market.

For example, the month's supply of inventory has fallen below the low threshold of a market in equilibrium (when there is enough supply to satisfy demand generally considered to be four or five months) over the last five consecutive months.  It has been between 3.6 and 3.8 months since June.  The 2009 average of 5.3 months represents a four-year low.  Likewise, the days on market indicator stood at 57 days in October.  It was the first time it's been this low in the last four years and the 2009 monthly average of 79 days beats the 2006 - 2008 monthly averages.

According to simple economic theory, as supply declines, demand increases.  That translates to increasing prices.  The median sales price in Loudoun County reached $345,000 in October, up 9 percent from this time last year.  It has ranged from $340,000 to $350,000 over the last five consecutive months.  A corollary to increasing prices is increasing close price to original list price ratios which have exceeded 94 percent in Loudoun since June.  In fact, the 2009 monthly average reflects a four-year high of 93.4 percent.

The number of distressed properties (foreclosures and short sales) that sold in October represented 44 percent of the total sales.  Of those 184 units, 50 percent were foreclosures; short sales also accounted for 50 percent of the total. 

Of the 476 active or pending listings marked as short sales or foreclosures, 74 percent were short sales and only 26 percent were foreclosures.  Every month since July, the number of distressed units amounted to 30 percent of Loudoun's total active and pending listings.  

Clearly the Loudoun housing market is enjoying a relative stability after four years of volatility as shown by steady prices, low available inventory, high close price ratios and falling days on market indicators.

Copies of the latest housing market statistics reports for Loudoun and Fairfax Counties are available here.   For questions, contact Rosemary deButts, REALTOR® with 1757 Real Estate Company, 540/338-2212, rdebutts@1757realestate.com.