Although it frequently is the peak of the annual resale market, May didn’t provide much reason to get excited.
to get excited.
Just 7,772 existing homes were sold last month in the Washington metropolitan area — 16 percent less than in May 2006. Last month outsold April, but that’s no surprise. May is almost always a better sales month than April.
So, if the peak already has passed, what can we expect from the summer? Sales almost certainly will trail off in the coming months, which won’t help with the current oversupply of homes on the market.
Because there are so many homes for sale right now, the homes that are selling are selling very slowly. Those sold in May spent just a little less time on the market than those that sold in April. Yet, despite this very slight improvement, homes in many markets are taking twice as long to sell as they did a year ago. Also, if you compare this May to May 2005, it will cause quite a shock.
One of the most depressing examples is Prince William County, where the average time on the market was just 15 days in May 2005 but was 115 days last month.
It also is depressing to realize that May is a spring month. Spring is the time of year when homes sell most quickly. So if homes are taking two to three months to sell in the spring, it is not likely that home sales are going to speed up suddenly in the summer or fall.
The recent jump in mortgage interest rates surely will diminish the already lackluster enthusiasm among home buyers. Because homes in our region became so expensive in the past five years, area buyers are particularly sensitive to interest rate increases.
That sensitivity is likely to slow sales, and the sluggish market could, in turn, cause home prices to remain low even longer than some expected when 2007 began.
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Contact Chris Sicks by e-mail (csicks@gmail.com).
The statistics in this story reflect a metropolitan area that includes the Maryland counties of Montgomery, Prince George’s, Anne Arundel, Howard, Charles and Frederick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria; and the District.
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