D.C.'s Housing Boom, Demystified

NEW YORK (MainStreet) -- At least one major urban area in the U.S. is stable. Washington, D.C.’s housing market showing the most pending contracts signed since 2005 in numbers for May 2011. Why our nation's capital? A stable job environment, unlike the rest of the country, is a big reason why.

Housing in D.C. is indeed stable – if not in a boomlet. According to the RBI Pending Home Sales Index, and data supplied by Jonathan Miller at Miller Samuel, a national real estate appraisal firm, things are definitely looking up for the housing market in our nation’s capital. Here are the key figures:

• Pending home sales in May rose 6.5% on a seasonal basis from April.
• Sales are up 43% from May 2010 to May 2011.
• Median sales increased 5.9% from the same period in 2010 to $353,606.
• The D.C. market saw 5,506 new home purchases in May.

Just as importantly, the all-important “days on the market” figures are working out in favor of the D.C. housing market. According to the RBI Index, the average days on market in May 2011 sank to the lowest level in seven months. Home sellers saw their homes sell within 68 days on average, a rate that was 10 days faster than in April.

In addition, local properties still are being absorbed at a speedy clip. Says Miller:

“The combination of the increase in new pending sales and the stabilization of active inventory continued to trend the absorption rate lower,” he said. “The monthly absorption rate—the number of months to sell all active inventory at the current pace of new pending sales— slipped to 2.8 months from 3 months in the prior month and 4.1 months in the same period last year and consistent with the 10-year 2.9 month average rate.”