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Records fall again, Jan-June

Written by: Chris Sicks for The Washington Times

The first half of 2002 set records, surprising many of us who thought 2001 had reached an unbeatable level of sales activity.

Sales during the first six months of 2002 were up 3 percent compared to last year, and the inventory of homes for sale was down 12 percent. That means buyers have had to compete even more aggressively than they did last year.

Thats hard to believe, because 2001 was the strongest sellers market on record.

The strong sales figures for this year are remarkable, but they tell just part of the story. The reason this year is so tough on buyers and so wonderful for sellers is the combination of high sales and low inventory.

I use the number of active listings on the last day of each month to measure how much selection there is for buyers and how much competition the sellers have. Its only a one-day snapshot, but it tells you what you need to know.

If you add up these active-listing figures for the first six months of 2002, youll come up with 68,876. I should point out that this is not an accurate count of actual listings. Thats very hard to calculate because many homes are listed repeatedly, are listed and never sold or simply sit on the market month after month.

It is sufficient to say that 69,000 is a very low number of active listings for any six-month period. In the first half of 2001, there were 78,000. In 2000, the number was 98,000. As recently as 1998, the count was 193,000.

The 48,000 sales we saw during the first six months of this year wouldnt be very compelling if they had happened in 1998. That would have been a sales-to-inventory ratio of only 25 percent, and the buyers would have had a much easier time than they have had this year.

When you consider that there were 48,000 sales and only 69,000 active listings in the first half of 2002, you can understand clearly shy buyers are battling one another for homes and why home prices are rising so much.

Chris Sicks

The statistics in this story reflect a metro area that includes the Maryland counties of Montgomery, Prince Georges, Anne Arundel, Howard, Charles and Fredrick; the Virginia counties of Arlington, Fairfax, Loudoun, Prince William, Spotsylvania and Stafford; the city of Alexandria, and the District.