No “Summer Slump” For Loudoun County Real Estate In 2008

Many people talk about the July/August "Summer Slump" and how Loudoun County home sales "mysteriously" drop. Well, there's been some truth to that in years past. But not this year. In fact, 2008 had one of the most fast paced residential real estate buying summers in recent years.

To show you what I'm talking about, let's look at a comparison of the summer of 2007 and this summer (2008)…

In 2007, we did see a bit of the "summer slump", specifically in July and August. Here's a graph showing the number of new listings coming on the market (supply) and the number of homes selling/going under contract (demand):

  

As you can see from the graph, the rate of new listings coming on the market stayed fairly steady only dropping 7.5 percent from June '07 to August '07. But buyer demand dropped 26 percent from June '07 to August '07, which is a significant amount. A significant drop in buyer demand compared to only a slight drop in inventory levels is one of the main reasons why prices decline. And a drop in prices is exactly what happened during the summer of 2007.

Now let's look at what happened this summer:

This graph tells a completely different story. The rate of new listings coming on the market dropped 13 percent, nearly double that of 2007. This meant less new (and existing) inventory on the market. Looking at the number of solds, it's clear that buyer demand actually increased from June to July and was still higher in August than it was in June.

So what does this mean to buyers and sellers?

For sellers, it means:

• Less competition
• More negotiating power
• Higher chance of selling faster if priced correctly

For buyers, it means:

• Fewer homes to choose from
• Less negotiating power when it comes to price
• Higher chance of competing/multiple offers on the properties that are "deals"

If you're a seller who was waiting for this year's "Summer Slump" to be over before listing their property, you missed a great opportunity. With many sellers waiting until the "fall market" to sell their property, it'll be interesting to see what happens with inventory levels and buyer demand this month and next.

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