April sales in the close-in Washington Metro area showed continuing improvement in the market. First of all, there is less than a 6 months' supply in inventory, with a market that went all the way from a 9 months' supply in December to 5.7 months' supply in April! The average price has been fairly flat during the past few years, with modest gains each year of around 1 to 2%, so April's gain of .57% over April 2007, is no surprise. However, the aspect of the market that has been in the sharpest decline, the volume of sales, has shown a dramatic improvement in April. Volume of sales declined 20% in 2006 and another 10% in 2007. This year started out even worse, with dollar volume of sales in January 42.7% lower than January 2007; February was 35% lower than the previous year; March was nearly 40% lower; but in April, volume of sales was just 18.45% lower than April 2007.
If these trends continue, we could be looking at the bottom of the close-in market as having occurred in the first quarter of 2008. The second quarter of the year is traditionally the "prime time" spring market, and the strength of May and June sales will be a strong indication of whether or not we are looking back at the end of the recent real estate slow- down.
* Statistics are taken from the Metropolitan Regional Information System for three areas: Washington, DC; Montgomery County, Maryland; and Fairfax County, Arlington, Alexandria and Falls Church in Virginia.