Loudoun County Real Estate Activity September 2006
October 10, 2006
| Loudoun Buyer Intensity |
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Red Bars: Sellers Market |
Green Bars: Buyers Market Gray Bars: Balanced Market |
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INVENTORY:
Inventory of homes for sale continue a slow decline to a bit above 4,100 from about 4,400 last month. Again, it is NOT because of more homes being sold because both new contracts and settlements (sold) are down 11% and 15% respectively. Re-lists are 33% of all new listings. For a buyer's market, we see fewer and fewer buyers taking advantage of the good deals that are available.
Average appreciation continues its decline to 6.2% year over year. Considering 90% of all current re-sales included another $10,000 on average in seller subsidies, the real decline is even greater by about two percentage points to 8.2%.
DAYS ON MARKET:
Average time it takes to sell breaks 100 days (109) for the first time in over 6 years. This appears to be headed even higher based on the rolling 30 day accumulation we provide on the Front Page Daily Market Watch (114 days as of this writing).
SOLD TO LIST PRICE RATIO:
The "negotiated" ratio is holding at 92 to 93%. Successful sellers are drastically lowering their price and buyers are getting another 7 to 8% during negotiations (plus seller subsidies that are not "officially" reported).
NEW CONSTRUCTION:
Incentives? Considerable! For buyers and agents alike. Recent ads are full of agent incentives: 5% of sales price...3% plus a $10,000 bonus. For buyers: finished basements...sun rooms...closing costs...mortgage payments for the first year. As of the end of September, the MLS is reporting 740 new homes on the market and only 34 SOLD. A dismal 5% absorption. I have to extract average price manually and will report in a new article. There are more for sale that are not reported in the MLS.
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Thanks again for providing good insight and analysis to the Loudoun market. Your numbers confirm the correction/ bust / whatever you want to call it is continuing.
If the actual price decline is in the 8.2% YOY range then the inflation adjusted "real" price decline is around 12-13%.
"For a buyer's market, we see fewer and fewer buyers taking advantage of the good deals that are available"
Even adjusted for inflation we are only back to late 2004 or early 2005 pricing in a lot of neighborhoods. If Moody's is correct and this downturn lasts 2-3 years we could see 2002 prices again before positive appreciation returns.
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