WASHINGTON, DC HOUSING REPORT MARCH AND THE FIRST QUARTER OF 2001 The Market Overall With inventories at a historic low, combined March sales of single family homes, condominiums and cooperatives rose 16% from February but were not able to surpass the very strong March's of 1999 and 2000, showing losses of 3% and 8% from those months. Combined sales did outperform the March's of 1990-98 by margins of 27% to 138%. For the first quarter of 2001, combined sales of homes and units are up 1% from last year and 4% from 1999. So far, single family home sales are ahead of 1999's pace but are behind last year's numbers, while the opposite holds true for condos and co-ops. Compared to earlier years of the 1990's, however, both homes and units show gains of 18% to 162%. The inventory of single-family homes, condos, and co-op is at an eleven-year low, 26% below the same point last year. This shortage had been most severely seen on the condo/co-op side over the last few months, but the number of homes for sale has now fallen to a comparably low level. Any increase in inventory has been met with a corresponding increase in number of sales, an indication of the strength of the market and the continued demand for properties. The combined effective inventory at the end of March stands at 1.37 months, compared to 1.69 months last year, 4.07 months in 1998, and 12.83 months in 1995 (the low sales point of the 1990's). At the end of the first quarter, both single family homes and condominiums/cooperatives saw an increase in average sales price compared to last year, but these numbers appear to have been influenced by the unusually high number of upper-end settlements during the period. Single Family For the month of March, new contracts on single family homes jumped 22% from February and registered the highest monthly sales total since May of last year. Sales, however, lagged behind the very strong March of 2000 by 6%, although they were ahead of March of 1999 by 3% and ahead of the March's of 1990-98 by margins of 13% to 151%. For the first quarter of 2001, sales of single family homes fell 2% behind last year's pace but they were ahead of the first quarter of 1999 by 8% and the first quarters of 1990-98 by margins of 17% to 181%. Compared to last year it is mostly the higher priced homes that are showing large sales gains. Homes priced between $450,000 and $600,000 (10% of sales) are 55% ahead of last year and homes priced over $750,000 (7% of sales) are 77% ahead of last year. Homes priced under $450,000 showed losses or much smaller sales gains due primarily to a lack of inventory. At the end of the first quarter, the inventory of single family homes for sale is at the lowest point of the last 11 years, 28% below the same point last year, 36% below the same point two years ago, and 70% below 1995 (the low sales point of the decade). It is lack of inventory of lower priced homes that is mostly responsible for the 28% decrease from last year. The number of available homes priced under $150,000 (52% of the market) is 42% below last year. The effective inventory at the end of March stands at 1.49 months, the lowest point of the last eleven years. The average price of homes settled in the first quarter is 16% ahead of the 2000 average sales price while the median price is virtually even with last year. One reason for the seemingly large gain in average sales price is that there has been an 80% increase in the number of settlements for homes priced over $750,000 in the first quarter, compared to only a 2% increase for homes under $750,000. It may not be until the end of the second quarter that we will be able to get a true picture of prices in D.C. Condominiums and Cooperatives Sales of condominiums and cooperatives in March showed a small gain of 4% from February but the number of new contracts lagged behind the very strong March's of the last three years -- 13% below 2000 and 1999 and 3% below 1998. March 2001 outperformed the previous March's of 1990-97, however, by margins of 19% to 118%. For the first quarter, sales of condos and co-ops are 6% ahead of last year but lag behind the record-setting pace of 1999 by 4%. The first quarter of 2001 is ahead of the same periods of 1990-98 by margins of 20% to 155%. Units priced at $150,000 and above (49% of the market) have managed to see an increase in inventory compared to last year and are 40% ahead of last year's sales pace. There are fewer units on the market under $150,000 (51% of the market) compared to 2000 and that range has seen a 21% drop in number of sales. The overall inventory of units for sale increased by 11% from February to March but still remains near historically low levels, 19% below the same point last year, 52% below two years ago, and 83% below 1995 (the low sales point of the 1990's). Like the single family inventory, it is the dearth of lower priced units that is responsible for the 19% decline from last year's level. Units priced below $150,000 are 47% below last year, while units priced at $150,000 and above actually show a gain of 82%. Much of the gain in inventory is being absorbed as soon as it comes on the market, especially in the $150,000 to $300,000 range. The effective inventory at the end of March stands at 1.09 months, the second lowest point of the last eleven years. The average sales price of condominiums and cooperatives settled through March is 27% ahead of last year, while the median price is ahead by 28%. Like single family sales, these large gains are due mostly to a large first-quarter increase in upper-end condo and co-op settlements, which skew the average and median prices. Settlements of units priced above $300,000 have increased by 129% over the first quarter of last year, while units priced below $300,000 increased by only 10%. Prepared by Peter Clute and Fred Kendrick PARDOE Real Estate ERA April 10, 2001 Data from the Greater Capital Area Association of Realtors