Fewer Listings Should Push Prices Higher

Only 4,000 homes were listed in the DC area in January. That is the best news sellers could ask for. As a result, we should see more competition among buyers this year. That is welcome, because buyer competition is the thing that pushes prices upward.

DC area listings fell 4 percent compared to January 2012—which doesn’t sound like a big deal. But compared to January 2008, listings were down 62 percent. The huge number of listings we saw several years ago is what caused the market to slow and pushed prices down. Every year since, we have been encouraged by the steady decrease in home listings and increasing sales activity.


Bottom line: Home prices are more likely to rise this year because the smaller inventory will force DC-area buyers to compete for the homes that are available.

Baltimore’s listings have also fallen since 2008. Last month’s listings were 36 percent lower than January 2008—not as sharp a drop as we saw in DC. Baltimore-area listings actually increased in January, rising 6 percent compared to January 2012.

Consider, also, that Baltimore-area contracts grew just 3 percent in January. That imbalance—with listings rising faster than sales—will not help Baltimore if it continues. It would only put a damper on buyer competition.


By contrast, the DC area enjoyed a 5 percent increase in contract activity in January. If contracts continue to rise while listings fall, DC-area buyers will face the stiffest spring competition since 2006.

Source: RBI, an MRIS company. Originally posted by Chris Sicks, who has reported on the Washington-Baltimore real estate market for 20 years.

Top Five Markets for Home Sellers

Realtor.com recently published a list of the top five markets for home sellers, and Washington, DC, ranked as number five on the list. In the past year, list prices in DC have increased about 16 percent, while inventory has dropped nearly 31 percent. Those are some great numbers for sellers, and if you're looking to buy, it's time to get in the game before prices rise much more.

Here are other cities that made the list, all out West:

4. Phoenix-Mesa, Ariz: List prices +24%, Inventory -16%
3. San Francisco, Calif: List prices +20%
2. San Jose, Calif: List prices +25%
1. Sacramento, Calif: List prices +40%, Inventory -67%

New Transportation Bill in VA Affects Real Estate

The Virginia General Assembly passed historic legislation to secure a comprehensive, long-term transportation funding and reform package for Virginia. We would like to thank all Virginia’s REALTORS® who answered the call to action on transportation. Your response helped make this historic legislation pass.

Transportation is a critical issue for Virginia. Without reliable roads and public transportation systems, the state becomes less attractive for businesses looking to move or expand. Realtors asked VAR to help push for a change to the state’s transportation funding and we obliged.

The bill would eliminate the $0.175 per-gallon gas tax that consumers pay at the pump, and it raises revenues through a variety of new and increased taxes:

• A new 3.5% tax on gasoline at the wholesale level (about $0.12 per gallon at current prices)
• A new 6% tax on Diesel at the wholesale level
• Raising Virginia’s sales and use tax from 5 percent to 5.3 percent
• Raising the motor vehicle sales tax from 3 percent to 4.3 percent over five years
• A new $100 annual tax for hybrid, electric, and alternative fuel vehicles (except for those powered by natural gas).

The plan is expected to raise about $880 million a year by 2018 (or $3.5 billion over five years) much of it earmarked for transportation.

There are also “Regional Congestion Relief “ plans for the Northern Virginia and Hampton Roads areas, which includes the following:
In Northern Virginia, (Planning District 8 to be exact), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase of 3% in the Regional Transient Occupancy tax (Hotel/Motel Tax)
• An increase to $0.35 per $100 in the regional grantor’s tax from the current $0.10 per $100

In Hampton Roads (click here to see areas included), additional transportation revenue will be created by implementing:

• An increase in the regional sales tax of 0.7%, for a total of 6%
• An increase in the local gas tax of 2.1 cents

These additional taxes are expected to raise between $300 to $350 million annually for Northern Virginia and between $175 and $219 million per year for Hampton Roads by 2018.

Source: Virginia Association of Realtors