WASHINGTON – The local housing market is gaining steam but some new numbers show a more complicated scenario.
An analysis by the Center for Regional Analysis at George Mason University finds median home prices increased in November 2012 compared to the year before.
“We’ve seen the highest year-over-year median price growth so far in 2012,” says Ryan Price, a research associate for the Center for Regional Analysis.
Of the homes sold in November, median prices are up considerably.
Prices went up 13.9 percent in Washington, D.C., 7.8 percent in Prince William County, Va., 8.6 percent in Prince George’s County, Md., 9 percent in Fairfax County, Va., 9 percent in Frederick County, 10.6 percent in Charles County, Md. and 40.7 percent in Falls Church City, Va.
However, Price says the numbers aren’t a simple indication that the housing market is strengthening. Low inventory is playing a key role.
“The inventory of homes for sale, continues to shrink in the region, which is definitely putting upward pressure on the prices around the region,” says Price.
Data shows listings remain at the lowest level in more than a decade.
When there are fewer homes selling, the median price can look over-inflated.
Price also says the rise in new contract activity in October led to an increase in sales in November. However, that trend didn’t continue into November.
New contract activity declined last month and is slightly below what it was last November.
“This could be an indication of tempered demand going forward,” says Price.