A Return To Normalcy? DC Home Sales in May at Highest Level Since 2005

• June 10th 2011

by Mark Wellborn

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Last month, 5,506 home purchase contracts were signed in the DC area, the highest total for the month of May since 2005, according to data released today by RealEstate Business Intelligence (RBI), the research arm of Metropolitan Regional Information Systems (MRIS). New pending sales increased 6.5 percent over the 5,170 contracts signed in April and a whopping 43.1 percent over the 3,849 contracts signed in May 2010. However, don’t start jumping up and down with excitement based on that annual increase.

“The year‐over‐year jump in new pending sales overstates the consistent improvement in the DC metro area housing market,” RBI analyst Jonathan Miller said. “A year ago, the contract signing deadline for the federal homebuyers tax credit had just expired and pending sales had fallen sharply because they had been ‘stimulated’ to higher levels in the preceding months.”

The report released this morning also stated that median sales prices for the area increased for the third month in a row and that, on average, homes are now on the market for the fewest number of days in seven months. However, both of these metrics are consistent with the seasonal pattern of the home sales market (i.e. the spring is when people are in the market to buy).

So how should people look at this? As good news for the DC market or just what is to be expected given that this is the time of year when people are out buying houses?

“We’re seeing improvement, and we’re seeing a return to normal seasonal patterns,” Miller told UrbanTurf. “We should be encouraged by this, but the encouragement should be tempered by the fact that this is what is supposed to happen around this time of the year. Going forward, the market is not going to be manic like we have seen in the last three years. Rather, it will likely be boring, and that would be a good thing.”

The area that MRIS analyzes includes DC, Montgomery County, Prince George’s County, Alexandria City, Arlington County, Fairfax County, Fairfax City, and Falls Church City.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/dcs_may_home_sales_highest_since_2005/3635.