Real estate statistics are deeply interconnected. The media often focuses on one thing at a time—number of sales, average prices, etc. But each piece of data is tied to and affected by the rest.
For example, home prices are important to everyone. When they fell not long ago, it hurt a lot of people. Now they are rising once again. But why are home prices rising?
Prices go up because of buyer competition. It’s really that simple. When buyers battle one another to get the homes they want, some will pay more to win. As they do, home prices rise.
So, if we want to understand what buyers are up to, we can study other data. One helpful thing to look at is how quickly homes are selling, or “days on market.”
As you can see at the bottom of this page, homes that closed in June spent a lot less time on the market than those sold a year ago.
In several cases, homes sold in half the time that it took in 2011. In Alexandria, for example, homes took 10.5 weeks to sell in 2011, but less than 4 weeks this year. That is the result of buyers who are ready and eager to make a deal.
And when buyers feel the heat of other home shoppers, they are more willing to offer the full asking price or more to get the property they want. In the Baltimore metro area, for example, homes that settled in June sold for 95% of the original list price. Two years earlier, that figure was just 89%. Similar increases have been seen throughout our region.
Those of you who keep an eye on statistics may remember that homes sold more quickly in 2003-2005 than they have this year. But, that’s not a good comparison. As we have learned, we were in a rather unhealthy and unrealistic real estate market back then.
The pace we have experienced this year is plenty fast, don’t you think?