2009 In Review: How Was the Real Estate Market?
The dust has settled on the statistics for 2009 – so now I can be my real geeky self and show you how the market did last year. I’m going to compare the sales to 2008 and 2007, but I did a similar review last year.
So what factors were in play? The $8,500 tax credit for first-time buyers, and the $6,500 “move-up” that began in November, along with low interest rates, and a recession. Sort of similar circumstances to 2008.
The main story of the year, in my opinion, is the low, *really low*, level of inventory. Below is a chart of the “Month’s of Supply” by year and month. This chart shows the number of months it would take to sell through everything currently listed for sale:
You can see that as the year went on, the inventory levels plummeted, and we never really got back up to where we were in ’08 or ’07. Properties were getting snatched up quickly, leaving few properties for sale. It was also causing a bit of stir – properties that were in hot demand were (and still are) receiving multiple offers, well above list price.
So how did that affect average sale price for Arlington housing?
As you can see, prices were lower (for the most part) in 2009, until we got to the end of the year. Notice the low inventory and the corresponding price increase. This chart is ALL housing types, and an overall average for Arlington County. Here’s a separate chart just for condos:
I think this graph is the best representation of how the market has behaved as we head into 2010. Condos got hit pretty bad over 2008-2009, especially for everyone who bought when all of the new construction was delivered in 2005-2006. But prices are starting to stabilize and many people are taking advantage of that. The inventory is still low, which is helping to drive up the prices.
Overall, I would say that pending another wave of foreclosures, the market stabilized in 2009. We saw another drop, and then a steady attempt to gain strength and movement up. Unless we get some more inventory on the market to sell, prices will continue to increase as the demand for properties far outweighs the current level of supply. I think part of the contributing demand is the tax credit, which says you must be under contract by April 30th. This incentive will play a huge part in the market for properties under $800,000 (but especially the market under $450,000).