Please ensure Javascript is enabled for purposes of website accessibility

Realities of Real Estate: Checking halftime stats on market

Are you ready for some football? It’s hard to believe, but it’s already that time of year. Last weekend, we had the first preseason game. And just a month from now, our Super Bowl champion Baltimore Ravens will kick off the regular season when they go to Mile High Stadium to hopefully hand the Denver Broncos their first loss. When the pigskins in play, you know the year is half over. As a result, we thought it would be a good time to see where we are with real estate and whether 2013 will shape up to be a winner.

There are many ways to measure the housing market, but the three most common data points include the number of homes sold, median sales prices and changes in how long it takes to sell. These statistics will usually give you a pretty good feel for how things are going. A six-month time frame will also provide enough data to eliminate being misled by some of the volatility that can occur on a month-to-month basis. So, let’s see how we fared for the first half of 2013 vs. the first half of 2012. We’ll also examine the data by county, looking at the five Maryland counties that tend to be the real drivers of real estate sales for this region — Anne Arundel, Howard, Baltimore, Montgomery and Prince George’s.

Homes sold: For the first six months of 2013, the number of homes sold in the mid-Atlantic region increased by 11.4 percent. Anne Arundel and Howard counties outperformed the region, up 12.2 and 12.7, respectively. Montgomery (11.3) was pretty much in line; Baltimore County was up 8.9, and Prince George’s trailed behind with an increase of only 3.7.

To give you some perspective on the relative size of these markets, those five counties make up almost one-third of all the homes sold in the mid-Atlantic region (as defined by our multiple list system, the Metropolitan Regional Information Systems). Montgomery County is the largest area, selling 5,297 homes in the first half of 2013. That compares with Anne Arundel at 2,917, Howard at 1,617, Baltimore at 3,650 and Prince George’s with 3,953 homes sold. With the exception of Prince George’s, 2013 is off to a strong start.

Median sales prices: The number of properties sold is an important measure of velocity, but what most homeowners want to know is what’s happening with prices. Overall, the median sales prices for the mid-Atlantic are up 8.4 percent.

That’s a healthy increase. Long-term, housing prices generally increase at an annual rate of 3 percent.

Whereas Prince George’s was a laggard with respect to the number of homes sold, it made up for it with solid price appreciation, 11.6 percent. Montgomery County was next (8.2%), followed by Baltimore (4.5), Anne Arundel (1.7) and Howard (1.1).

In the entire area covered by MRIS, the median sales price stands at $330,000. Of the five counties we’re looking at, the most expensive homes are found in Montgomery County, with a median selling price of $430,000. That compares with Prince George’s, where it’s $205,000. Anne Arundel falls somewhere in the middle at $320,000. It’s important to note that changes in sales prices can sometimes be distorted. At times, it’s difficult to discern if increases are due to appreciation or a change in the mix of homes sold. If expensive homes are selling at a faster pace than low-priced properties, it will artificially skew a price analysis to the upside. Right now, the prevailing wisdom is that low-priced houses are selling well and high-priced homes are also moving, but all the stuff in the middle is still a little slow.

Days on the market: The final measure we’ll review is how long it takes to sell a house, or days on the market (DOM). For the past several years, the average DOM hovered around 90 to 125 days. But recently, it’s started to drop. In June 2013, the average was 54 days for the mid-Atlantic region. Over the entire first half of 2013, it averaged 71 days, down 23.7 percent against the same period year ago. By county, the numbers were: Anne Arundel, 95 days; Baltimore, 87; Howard, 67; Montgomery, 51; and Prince George’s, 64 days.

For the most part, the recent drop in days on the market is due to a lack of supply, rather than an increase in demand. Buyers are coming into the market, but many sellers are still staying away, hoping for higher prices. As prices improve, we suspect that more property will become available and DOM will stabilize. During the peak of the housing boom, DOM fell to less than 30 days; but realistically, it should take about three months to sell a house.

In sum, the housing market is improving. We’re not blowing the doors off, but for the long-term health of the industry, slow and steady is much better than boom to bust.

Bob and Donna McWilliams are practicing real estate agents in Maryland with more than 25 years of combined experience. Their email address is McWilliams@BobDonna.com.