MARKET IN A MINUTE A SUMMARY OF MARKET CONDITIONS FOR MARCH & 1st QUARTER 2016

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1 STATPAK ` WASHINGTON, DC APRIL 2016 MARKET IN A MINUTE A SUMMARY OF MARKET CONDITIONS FOR MARCH & 1st QUARTER 2016 Contract activity in March 2016 was up 12.6% from March of 2015, and there were increases in five of the six price categories. Through the first three months of the year, new contract activity is up just 6.6%. The average number of days on the market for homes receiving contracts increased slightly from 38 days in March 2015 to 40 days this March. URGENCY INDEX The Urgency Index, simply the measure of the percentage of homes going under contract that were on the market 30 days or less, was almost unchanged in March compared to the year prior. During the past 12 years, the Index has been as high as 93% (May 2005) and as low as 29% (December 2008). In March 2016, the Urgency Index was 71.6%, down from 72.1% in March Despite this modest decrease, DC s Index is still the best in the Metro Area. INVENTORY The number of homes on the market at the end of March was 16.5% higher than the inventory at the end of March There were 25.5% more new listings that came on the market in March this year. Despite this big jump in inventory, overall supply at the end of March was 1.3 months, almost the same as last year at this time. DC s supply remains the tightest in the region by a half month. INTEREST RATES Mortgage rates are hovering right about where they were this time last year and this time last month. 30-year fixed rates were at 3.71% at the end of March, just 1 basis point higher than this time last year and 9 basis points higher than just month ago. The National Association of REALTORS most recent forecast pegged rates at just over 4% by the end of the year. AFFORDABILITY The payment on a no-money-down, 30-year fixed mortgage for a median-priced home is 1.1% lower than it was in March 2006 and is almost unchanged from this time last year -- all thanks to lower interest rates. The mortgage payment for a median priced home ($2,330 in March) was lower than the median rented price ($2,500 in March). DIRECTION OF THE MARKET The spring market has seen a big jump in contract activity and new listings. The real estate market in Washington, DC continues to be the strongest in the region by just about every measure, and supply continues to be tight in most areas and price ranges. Nonetheless, we don t see anything on the horizon domestically that is likely to make 2016 overall much different than It is reasonable to expect that there will be some easing off on DC s home price appreciation rate -- but it hasn t happened yet! Unless otherwise noted, data derived from Metropolitan Regional Information Systems, Inc. (MRIS ). Northern Virginia is defined as Arlington and Fairfax counties and the cities of Alexandria, Falls Church & Fairfax. Copyright McEnearney Associates Washington, DC StatPak - Page 1

2 MONTHLY SUMMARY MARCH 2015 vs. MARCH 2016 March March % WASHINGTON, DC Change Number of Sales % Fully Available Inventory on 3/31 1,058 1, % Number of New Listings 992 1, % Number of New Contracts % Days on Market - New Contracts % Average Sales Price $585,727 $615, % Average Seller Subsidy $2,462 $2, % Urgency Index 72.1% 71.6% -0.7% Months' Supply % MONTGOMERY COUNTY Number of Sales % Fully Available Inventory on 3/31 2,554 2, % Number of New Listings 1,765 2, % Number of New Contracts 1,293 1, % Days on Market - New Contracts % Average Sales Price $496,797 $474, % Average Seller Subsidy $3,746 $3, % Urgency Index 58.2% 63.3% 8.8% Months' Supply % NORTHERN VIRGINIA Number of Sales 1,558 1, % Fully Available Inventory on 3/31 3,903 4, % Number of New Listings 3,204 3, % Number of New Contracts 2,244 2, % Days on Market - New Contracts % Average Sales Price $547,979 $537, % Average Seller Subsidy $3,115 $3, % Urgency Index 68.3% 68.9% 0.9% Months' Supply % LOUDOUN COUNTY Number of Sales % Fully Available Inventory on 3/31 1,863 1, % Number of New Listings 1,098 1, % Number of New Contracts % Days on Market - New Contracts % Average Sales Price $471,721 $482, % Average Seller Subsidy $4,242 $4, % Urgency Index 58.8% 70.4% 19.7% Months' Supply % * Note: Percentages depicted in red indicate a negative market trend; black indicates a positive market trend Copyright McEnearney Associates Washington, DC StatPak - Page 2

3 YEAR-TO-DATE SUMMARY 2015 vs Year-to-Date Jan-Mar Jan-Mar % WASHINGTON, DC Change Number of Closed Sales 1,547 1, % Average Month-End Available Inventory 992 1, % Number of New Listings 2,392 2, % Number of New Contracts 2,017 2, % Days on Market - New Contracts % Average Sales Price $611,147 $612, % Average Seller Subsidy $2,341 $2, % Average Urgency Index 64.3% 64.5% 0.4% Average Months' Supply % MONTGOMERY COUNTY Number of Closed Sales 2,033 2, % Average Month-End Available Inventory 2,329 2, % Number of New Listings 3,873 4, % Number of New Contracts 3,012 3, % Days on Market - New Contracts % Average Sales Price $472,788 $473, % Average Seller Subsidy $3,574 $3, % Average Urgency Index 49.4% 51.5% 4.4% Average Months' Supply % NORTHERN VIRGINIA Number of Closed Sales 3,662 3, % Average Month-End Available Inventory 3,432 3, % Number of New Listings 7,100 7, % Number of New Contracts 5,183 5, % Days on Market - New Contracts % Average Sales Price $543,721 $536, % Average Seller Subsidy $3,179 $3, % Average Urgency Index 57.1% 56.3% -1.3% Average Months' Supply % LOUDOUN COUNTY Number of Closed Sales 1,105 1, % Average Month-End Available Inventory 1,685 1, % Number of New Listings 2,438 2, % Number of New Contracts 1,613 1, % Days on Market - New Contracts % Average Sales Price $465,538 $472, % Average Seller Subsidy $4,097 $4, % Average Urgency Index 48.0% 55.9% 16.5% Average Months' Supply % * Note: Percentages depicted in red indicate a negative market trend; black indicates a positive market trend Copyright McEnearney Associates Washington, DC StatPak - Page 3

4 WASHINGTON, DC -- Detail Pages Interest Rate YEAR FIXED AND 1-YEAR ADJUSTABLE RATES Month-End Mortgage Rates Current 1-Year ARM 30-Year Fixed MORTGAGE RATES 30-year fixed interest rates at the end of March averaged 3.71%, compared to 3.87% at the end of March One-year adjustable rate mortgages were 2.90% at the end of March 2016, which is up from 2.50% at the end of March BUYING POWER Mortgage Amount with $1,000 Payment BUYING POWER A $1,000 principal and interest payment supported a loan of $216,991 at the end of March, which is $267 less than March 2015 and $41,258 more than March In March 2006, it would have taken a monthly PI payment of $2,357 to purchase a medianpriced home. Today it takes a payment of $2,330 to buy a median-priced home. That s just a 1.1% decrease. However, the median sales price is over $1000,000 higher now than in March AVERAGES SALE PRICE Washington, DC Current AVERAGE PRICES The average sales price in March 2016 was $615,847, an increase of 5.1% from the March 2015 average price of $585,727. DC has the highest average and median sales price in the region. Remember that the change in the average sales price -- up or down -- doesn t mean that individual home prices are impacted the same way. Copyright McEnearney Associates Washington, DC StatPak - Page 4

5 % of Contracts on the Market for 30 Days or Less 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Jan 12 Mar 12 URGENCY INDEX % of Contracts on the Market for 30 Days or Less Washington, DC Current % of Contracts # Contracts May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Jan 15 Mar 15 May 15 Jul 15 Sep 15 Nov 15 Jan 16 Mar 16 1, Number of Contracts URGENCY INDEX Current This chart compares the number of contracts (green line) to the percent that were on the market 30 days or less (blue bars). At first glance, it may appear that the lower contract activity also means a lower percentage of homes that sell quickly -- but that s not always true. As an example, December is always the month with the lowest number of contracts. December 2011 (not on this chart) had an index near 30% range, but that jumped to 50% in 2012, an early indicator that the market was picking up heading into URGENCY INDEX Washington, DC -- March URGENCY INDEX - March In the past 12 years, the March Urgency Index has been as high as 77.7% and as low as 42.1%. Look how much buyer expectations changed from March 2005 to The number of ratified contracts decreased by 4.5%, but the Index fell by 30.9%, indicative of some real buyer pessimism. The average Mar. Urgency Index during the past 12 years is 59.9% -- which is significantly lower than where it is now in DC. There was a 12.6% increase in the number of new contracts for March 2016 compared to but the Urgency Index decreased from 72.1% to 71.6%. URGENCY INDEX DC Metro Area by Jurisdiction Comparison - March 2016 URGENCY INDEX -- DC Metro Area The differences between the DC Metro Area markets are less pronounced than they have been in recent months. The average March Urgency Index during the past 12 years for all four of the jurisdictions we track is 59.4%. Today, the District is outperforming its neighbors at 71.6%, which is higher than its historical average. DC has fared better than its neighboring jurisdictions for well over a year, and clearly has the most robust market in the region. But it looks like the suburbs may be catching up! Copyright McEnearney Associates Washington, DC StatPak - Page 5

6 $1,500,000 and higher $1,000,000 - $1,499,999 NEW CONTRACT ACTIVITY Washington, DC -- March 2015 vs. March 2016 by Price Range $750,000 - $999,999 $500,000 - $749,999 $300,000 - $499,999 $0 - $299, March 2016 March NEW CONTRACT ACTIVITY As noted on page 2, the number of new contracts ratified in March 2016 was up 12.6% from March 2015, but there was a decrease for one price category. As noted on page 3, contract activity year-to-date is up 6.6%. 17.3% of all homes going under contract in March had at least one price reduction. The other jurisdictions in the Metro Area are typically seeing around 22-27% of homes with a price reduction before receiving a ratified contract # of New Contracts FULLY AVAILABLE Washington, DC -- March 31, 2015 vs. March 31, 2016 FULLY AVAILABLE As noted on page 2, the available inventory for March 2016 was up 16.5% from March % of all homes on the market have had at least one price reduction since coming on the market. The lowest price category decreased in inventory. MONTHS SUPPLY Washington, DC -- End of March 2015 vs. End of March 2016 MONTHS SUPPLY The overall supply of homes on the market at the end of March 2016 was 1.3 months, which is a basically the same as the supply at the end of March That s the lowest supply in the Metro Area. In addition to the lowest overall supply, DC has the most balanced supply in the region across all but the highest price category. Copyright McEnearney Associates Washington, DC StatPak - Page 6

7 AVERAGE NUMBER OF DAYS ON MARKET Washington, DC -- March 2015 vs. March New Contracts $1,500,000 and higher $1,000,000 - $1,499,999 $750,000 - $999,999 $500,000 - $749,999 $300,000 - $499, March 2016 March AVERAGE NUMBER OF DAYS ON THE MARKET -- NEW The average number of days on the market for all homes receiving contracts in March 2016 was 40 days, which is an increase of 5.3% from 38 days in March DC is the jurisdiction with the lowest average days on market. $0 - $299, # of Days on Market NUMBER OF NEW, NEW, AND ACTIVE Washington, DC -- January 2010-Current NUMBER OF NEW, AND ACTIVE There were 1,245 new listings that came on the market in March 2016, a 25.5% increase from the 992 in March The wide gap between available listings and new contract activity that characterized the second half of the last decade has steadily narrowed during the past three years. RELATIONSHIP OF SALES PRICE TO ORIGINAL LIST PRICE vs. DAYS ON MARKET Resale Properties Sold in Washington, DC -- March 2015 vs. March 2016 RELATIONSHIP OF SALES PRICE TO ORIGINAL LIST PRICE vs. DAYS ON MARKET Initial pricing strategy is critical to the listing process, regardless of market conditions. The longer a home sits on the market, the deeper the discount to its original list price will likely be. Homes settling in March 2016 that received contracts their first week on the market sold, on average, 2.58% above list. Those that took 4 months or longer to sell sold for 8.32% below the original price. SOME DEFINITIONS AND EXPLANATIONS TO AID YOUR UNDERSTANDING OF THE DATA The data shown here are collected, in whole or in part, from the Metropolitan Regional Information System, Inc, and are believed to be reliable but are not guaranteed Sales are transactions that settled during the statistical period; Under Contracts are contracts negotiated during the statistical period, but not yet settled Available Listings reflects single-family homes, town homes, new homes and condos on the market at the end of the period in question. Months Supply is simply the number of Fully Available Listings on the market at the end of the month divided by the number of Contracts ratified that month. Copyright McEnearney Associates Washington, DC StatPak - Page 7

8 Analysis by Property Type -- Condo/Co-op CONDO/CO-OP - Condo/Co-op New This Month Total Active Listings % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % The number of new listings for condos and co-ops coming on the market increased 19.0% compared to March The fully available inventory of condos as of March 31, 2016 is 23.1% more than the same time in CONDO/CO-OP - Condo/Co-op New This Month Contracts % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % The number of condos and co-ops receiving ratified contracts increased 9.2% in March 2016 compared to March Year-to-date, contract activity is up 7.9% compared to SETTLEMENTS Condo/Co-op New This Month Settlements % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % CONDO/CO-OP -- SETTLEMENTS AND AVERAGE PRICE The number of condos and co-ops settling in March 2016 increased 7.8% compared to March Year-to-date, the number of settlements is up 7.4%. The average price was up 1.1% compared to March Year-to-date, the average price is down 1.7%. Average Sales Price: Mar 2015 Mar 2016 % Change YTD 2015 YTD 2016 % Change Condo/Co-op $483,568 $488, % $492,203 $483, % Copyright McEnearney Associates Washington, DC StatPak - Page 8

9 Analysis by Property Type -- Fee Simple Attached Fee Simple Attached New This Month Total Active Listings % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ATTACHED HOMES -- The number of new listings coming on the market in March 2016 for fee simple attached homes increased 33.2% compared to March The fully active inventory at the end of March is up 13.8% compared to the available inventory at the end of March Fee Simple Attached New This Month Contracts % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ATTACHED HOMES -- Contract activity for attached homes increased 7.4% in March 2016 compared to March Year-to-date, contract activity is up 2.8% compared to last year. SETTLEMENTS Fee Simple Attached New This Month Settlements % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ATTACHED HOMES -- SETTLEMENTS AND AVERAGE PRICE The number of settlements increased 7.5% in March 2016 compared to March Yearto-date, the number of settlements is down 2.5%. The average sales price was up 4.3% in March 2016 compared to March The average sales price year-todate is up 2.0%. Average Sales Price: Mar 2015 Mar 2016 % Change YTD 2015 YTD 2016 % Change Fee Simple Attached $648,989 $677, % $656,450 $669, % Copyright McEnearney Associates Washington, DC StatPak - Page 9

10 Analysis by Property Type -- Fee Simple Detached Fee Simple Detached New This Month Total Active Listings % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % DETACHED HOMES -- The number of new listings for fee simple detached homes was up 33.8% in March 2016 compared to March The number of detached homes on the market on March 31, 2016 was up 2.5% compared to March 31, Fee Simple Detached New This Month Contracts % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % DETACHED HOMES -- Contract activity for detached homes increased 42.2% in March 2016 compared to March The number of contracts yearto-date is up 12.1%. SETTLEMENTS Fee Simple Detached New This Month Settlements % Change % Change $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % DETACHED HOMES -- SETTLEMENTS AND AVERAGE PRICE The number of settlements increased 21.0% in March 2016 compared to March Yearto-date, there has been an increase of 2.6%. The average sales price for detached homes increased 11.5% in March 2016 compared to March The average price year-to-date increased 6.0%. Average Sales Price: Mar 2015 Mar 2016 % Change YTD 2015 YTD 2016 % Change Fee Simple Detached $764,304 $852, % $816,614 $865, % Copyright McEnearney Associates Washington, DC StatPak - Page 10

11 Absorption Rate by Property Type The following tables track absorption rate by property type, comparing the rates in the just-completed month to the rates in the same month of the previous year. The absorption rate is a measure of the health of the market, and tracks the percentage of homes that were on the market during the given month and in the given price range that went under contract. [The formula is # Contracts/(# Contracts + # Available).] An example: The absorption rate for detached homes priced $500,000-$749,999 in March 2016 was 50.0%; that compares to a rate of 30.2% in March 2015, and the increase means the market was better in 2016 for that type of home. If the absorption rate was less in 2016 than in 2015, we have put the 2016 rate in red. This month there was improvement for 11 of the 18 individual price categories. Condo/Co-op March 2015 March 2016 Absorption Rates Listings Contracts Rate Listings Contracts Rate $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ABSORPTION RATES -- CONDOS AND CO-OPS The overall absorption rate for condos and co-ops for March was 39.7%, a decrease from the 42.7% rate in March The absorption rate for condos across most price ranges is more balanced in DC than anywhere else in the region. Fee Simple Attached March 2015 March 2016 Absorption Rates Listings Contracts Rate Listings Contracts Rate $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ABSORPTION RATES -- ATTACHED HOMES The overall absorption rate for attached homes for March was 48.6%, a decrease from the 50.1% rate in March Again, look at the balance across most price ranges. Fee Simple Detached March 2015 March 2016 Absorption Rates Listings Contracts Rate Listings Contracts Rate $299,999 and under % % $300,000 - $499, % % $500,000 - $749, % % $750,000 - $999, % % $1,000,000 - $1,499, % % $1,500,000 & higher % % Grand Total: % % ABSORPTION RATES -- DETACHED HOMES March 2016 s absorption rate for detached homes was 41.1%, an increase from 33.4% in March And the balance among the price ranges is evident here as well. Copyright McEnearney Associates Washington, DC StatPak - Page 11