As featured in DC Urban Turf
Contract ratio is one of the most important, but least known metrics when considering the climate of a housing market.
Contract ratio essentially compares the total number of homes under contract in a given period to the overall number of active listings. A higher ratio signifies an increase in contracts compared to supply. For example, a ratio of 1.2 means there are 1.2 listings under contract for every listing that is active. Any ratio above 1.0 illustrates a competitive housing market.
In our continuing granular look at the DC housing market, UrbanTurf dug into data for neighborhood markets around the city to find the areas with high contract ratios this spring.
Overall, the DC housing market had a contract ratio slightly above 1.0 in April, an illustrative sign of a seller’s market. North Cleveland Park holds on to its title as the most competitive neighborhood market in the city with a contract ratio of 2.20. Coming in second is Logan Circle (1.64), followed by AU Park (1.5), Glover Park (1.43) and Mount Pleasant (1.41). Rounding out the list are Bloomingdale and Columbia Heights with contract ratios around 1.2.
High contract ratio usually points to low housing supply, and that is the case in virtually all these neighborhoods. With the exception of AU Park, all the neighborhoods above had housing supplies of less than 1.25 months.