Area Home Sales Good, Not Great

By Sicks, Chris | The Washington Times (Washington, DC), January 24, 1997 | Go to article overview

Area Home Sales Good, Not Great


Sicks, Chris, The Washington Times (Washington, DC)


Sales of residential real estate in the metro area went up 3 percent in 1996, an improvement over 1995 but historically a rather meager performance.

Sales began last year in a dismal fashion as January's wicked weather nearly shut down the area's housing industry. There were fewer home sales in January 1996 than in any month in the previous five years.

But things bounced back smartly in February, as sales outdid February 1995 by 18 percent.

"Sales in 1996 were very good in the first part of the year," said Stan Stewart, president of the Northern Virginia Association of Realtors and managing broker for Century 21-Quality Homes in Mount Vernon.

"It was a good year. Not a great year, but a good year," Mr. Stewart said.

The recovery from January's freeze-out continued until July, when both new and existing-home sales lost their steam and fell behind 1995's pace.

June actually was the peak for sales last year - two months earlier than 1995's peak.

It used to be unusual in this area for home sales to peak after May or June, but 1995's sales peaked in August for the first time in recent memory.

"The market doesn't do now what I remember it always did," Mr. Steward said. "In recent years, we have had really good sales in the hot months, and those used to be our slow period."

Regardless of when the peak actually occurred last year, it was a fairly modest peak. June's 7,257 new and existing-home sales fall short of June 1993's 7,721.

But then, 1993 has been the best sales year of the 1990s so far. Not one month last year outperformed 1993. Compared to 1993, total sales for 1996 were down 12 percent.

But regardless of what the statistics might say, there were nearly 78,000 homes sold in our area last year.

And that is not a small number however you might look at it.

More than 47,000 of those sales were resales. That side of the business fared a bit better than the new-homes side - resales were up 4 percent while new-home sales were up 2 percent to 26,800.

New homes generally make up just over a third of our sales each year. Last year, 36 percent of homes sold were resales, down just a bit from 1995's 37 percent.

Nationally, the Washington area is quite a new-homes giant, rated fifth after Atlanta, Phoenix, Chicago and Las Vegas in new-homes permits.

But our population is not increasing at that same pace, begging the question, "Why do we need so many new houses?"

Fewer renters might be one reason. Rental vacancy rates are on the rise for the metro area from 3.7 percent in 1986 to 8.3 percent in 1995.

"Another reason might be that population is moving farther out, away from the District," said Dan Crist, a research economist at the National Association of Home Builders.

"When you look at counties like Prince William, Loudoun and upper Montgomery, there is a lot of new growth and corresponding increases in population."

The departure of many residents from the District is well-known. According to the U.S. Census, the city's population dropped from 607,000 in 1990 to 567,000 in 1994.

Few new homes are built in the District, of course. Only 342 were built in 1996.

New construction happens in the suburbs, and is split almost evenly between the two sides of the Potomac.

Virginia's sales were 12,941 last year, and Maryland's were a notch higher at 13,515.

"Maryland and Virginia had very similar experiences in 1996," said Ken Sugarman, vice president at Housing Data Reports in Washington.

"Both sides saw a flip-flop of product types, with a surge in single-family sales - up 8 percent - while town homes were down 8 percent."

That reverses 1995's trend, when town-home sales increased significantly all over the market. Last year, however, the only areas to see those sales increase were Rockville and Alexandria. …

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