It's time to take a look at what the market results for January had to say. And, once again the picture remains positive if you're looking for good sales numbers.

In Culpeper the sales for January dropped by about 50% from the previous month. But lest you think that's a negative, that's still about 30% higher than at this time last year. Inventory continues to shrink, down to about a 16 month supply right now. And, based on the number of contracts written, things continue to sell. This is all good news for sellers. The bad news remains that what is selling is primarily foreclosures and they're selling at a steep discount. The average sales price fell about 40% year over year. And, as long as the foreclosures continue to hit the market, pricing will remain depressed. More on the picture later.

In Fauquier County we see the same kind of patterns with inventory falling to a 15 month supply. Sales fell there in January as well, but again, that may have more to do with the holidays than with any specific market forces. And, the number of contracts written remains strong. In Fauquier sales prices were more stable in January, falling only 4% year over year. That's one month's data so it's too soon to tell if that's an anomaly. With 15 months of inventory I'd be surprised to see any significant strengthening of prices in the short term.

Prince William County is the place to be if you're a seller, but may be becoming problematic for buyers. We're down to a five months supply of inventory. That indicates we've got a pretty balanced supply of inventory there. And, my experiences there bear that out. As I was showing homes this weekend in Prince William, a smaller percentage of what I showed were foreclosures or short sales. But prices are still down significantly, 34% year over year.

Rapphannock County also saw inventory shrink this month, falling to 73 homes for sale. That's a pretty fast turn around from the high of 103 we saw in October. Some of that is attributable to sales, but much more of it is from properties being withdrawn from the market. And, even in Rappahannock County there are foreclosure sales. One occurred just down the road from my house this month.

The real estate market may be about to see some changes, however. In anticipation of the President's announcement on Wednesday of a plan to help the real estate market, many banks have now announced foreclosure moratoriums. The banks include giants such as Citi and Bank of America. And Fannie Mae and Freddie Mac had already announced foreclosure moratoriums of their own. With only five months of inventory available now in Prince William County we may be on the verge of seeing some price stabilization at the very least over the next couple of months. Depending on what happens after the moratorium there's even the potential for some price increases.

If I were buying in Prince William county I'd be tempted to jump sooner rather than later. As I believe this is the best combination of inventory, prices and incentives you're likely to find for the next several months. In Fauquier and Culpeper inventory levels are high enough that I think you could justify waiting a couple of months to see what will happen. And, in Prince William, it's possible that next fall the edge would go back to the buyers again. But that's a little too far out to predict without knowing what actions we'll take from DC.

September's numbers are the kind to make you "ooooh" and "aaaah". They're that good!

In Culpeper, Fauquier and Prince William counties, inventory continues to fall and sales continue to rise.

In Culpeper inventory is down from 823 at this time last year to a measley 632 this year. Sales doubled year over year, 27 last year and 54 this September. And the trend looks to continue with 72 new contracts written in September!

There's good news for those of you in Fauquier as well. Inventory has declined from 832 last year to 696 at the end of September. While sales didn't quite double here they did a very respectable increase from 38 a year ago to 53 now. And new contracts soared to 83.

In Prince William things have changed so much that you've got to feel sorry for the buyers. Total inventory has declined from 5674 to 4489. Meanwhile sales have almost tripled from 327 to 934. 1059 new contracts have been written in Prince William. Multiple offers on foreclosures are now routine there. And bidding wars are back, if the house is in good enough condition and priced cheaply enough.

Rappahannock County is the rain cloud amidst all this sunshine. Inventory continues to rise there with 93 homes on the market now compared to 83 a year ago. There was one sale last month compared to 4 a year ago. And there are three new contracts. In general, sellers in Rappahannock County have been slower to lower prices, believing that the counties unique circumstances protect them from the economic forces at work. And, to some extent that's true. But clearly not to the extent many sellers believe! The other factor at work here are a large number of very expensive properties, owned by very wealthy people, who are perfectly willing and able to wait a year or two for market conditions to change.

Overall, sellers should be singing hallelujahs. But, here's why I suspect many of you aren't. What we continue to see are lots of sales of foreclosures and short sales at very low prices. Many sellers are not willing or able to compete at those prices.

While inventory levels have fallen to around a 12 month supply, it's still not low enough to stop the price declines. If you're a seller in this market, desparate to sell, you're probably thinking that there's not much comfort in this if the only thing selling is foreclosures. But sooner or later, surely, we're going to run out of foreclosures. Here's the question, if that's a year from now, or longer, can you wait?

I've got February's market numbers. I'll give you the scoop on Culpeper, Fauquier, Rappahannock, Prince William and Warren Counties. If anyone is interested in information on any other counties, contact me and I'll be happy to provide.

In general, what we're seeing across the board is a jump in inventory. This being March, that's not a surprise at all. The increase in inventory will continue for the next several months.

In three out of the five counties the number of closed sales was flat. Rappahannock had one sale in both January and February. Warren had 22 each month. And Fauquier actually fell from 33 in January to 32 in February. As I said, flat.

Prince William showed a huge increase in the number of contracts written, from 498 in January to 698 in February. This may have something to do with the steeper price drops we've seen in that market. They may have finally broken the stalemate between buyers looking for a deal and sellers determined to hang on to every dime of equity they can, even if it means not selling!

Warren showed a nice increase in contracts, up by about 25% from last month. Rappahannock went from 0 last month to 1 this month.  Culpeper was up just slightly from 47 written last month to 51 written this month. Fauquier actually fell from 53 to 44.

Most of the counties are sitting at around 2 years worth of inventory on the market right now. Prince William is an exception with only about 16 months of inventory. The numbers for Rappahannock are pretty meaningless, but if you're interested the math shows a 70 month supply!

Across the board prices are still falling. And, I expect that to continue throughout 2008. This will vary a lot by neighborhood. In some neighborhoods, you may see some stabilization. In some neighborhoods, there's still a lot of adjustment needed. I'd be shocked if anyone found a single neighborhood where prices increase over the next year.

That's the scoop for February! If anyone needs me to dig deeper into any of these numbers I'm happy to help. Just send me an e-mail.