Ok….I have to admit it….I’m surprised by this month’s numbers. Since April of this year we have been sitting very close to a 5-month supply of homes on the market. I our current economic context I have been very excited by the 5-month number. It means that 20% of the people who are trying to sell there home have been successful each month. This is not a great, but not a horrible number.
But look what happened in October. Our government told us we were in a global financial crisis. Stocks fell through the floor. Large companies declared bankruptcy. There was a bailout plan announced that seemed to give no confidence to investors or others in the United States or around the world. What would you expect would happen to our local Real Estate market in Northern Virginia? I expected numbers to be down quite a bit because of the fear people were showing regarding their finances.
The numbers did go down slightly, but much of that can be attributed to normal seasonal changes in the market. There are many bright spots in these numbers. The raw number of sales was up more than 30% from the previous October, while listings were down 15% during the same time period. In October 2007, there were 8.4 months worth of house sales on the market. In October 2008 that number was reduced to 5.5 months. This tells us that our market stayed very strong through a very traumatic month for our nation’s economy.
One note about my spreadsheet below: I’ve added a column this month called “absorption rate.” This is the rate the real estate market is “absorbing” homes, measured in months. In other words, this how long it is taking to sell a typical home.
The spreadsheet shows the data from October 2005 through October 2008 for Arlington County, Alexandria City, Fairfax County, Fairfax City, And Falls Church City.
Written by Jeff Royce of RE/MAX Choice Real Estate, Fairfax, VA, 571-482-7817