MoCoRealEstate

Montgomery County homebuyers want three things: Price, Price and Price.

February 8th, 2009 Categories: Market Updates

From the overview of Montgomery County sales stats from January, we see that over the last four months, contracts have increased 7% compared to the same period last year.  We also see more activity in lower price ranges.  But Montgomery County is a big place, so what’s driving sales in different areas of the county.

Price.

OK, but what about closer-in locations that have held their value better?

Price and Price.

What about homes in higher price brackets?

Price, Price and Price.

When I analyzed statistics for every area of Montgomery County, the trend became crystal clear: buyers are flocking to areas with the biggest pricing declines - the cheaper the better.  And, these are the same areas with very high levels of distress sales and foreclosures.  Step outside of these areas and sales activity is down.  Let’s take a look at each area of Montgomery County.

Areas with Sales Increases

The areas with the highest percentage of distress and bank listings are Clarksburg (29%), Gaithersburg (43%), Germantown (42%) and Silver Spring (29%).  And the areas with increases in the number of contracts are… guesses anyone?  That’s right – exactly the same areas.  Here’s a snapshot for each area.

Potomac is Bucking the Trend… Sort of

Sales activity for Potomac is the one area with a brisk 29% sales increase for homes listed from $500,000 to $900,000.  Over $900K, sales activity is down 33%.

All Other Areas

Bethesda area sales are down across all price ranges.  Rockville, North Potomac, Olney and Poolesville all have had fewer contracts except for the least expensive homes.

Trends to Watch

Given the high rates of contract activity for entry-level homes, I expect to see price stabilization in this market segment first.  Assuming we continue to see strong employment and low interest rates, I would then expect to see prices stabilize for homes priced under $900,000.  I expect to see a rebound in the upper brackets with a broader rebound in the market and economy.  When will that be?  Your guess is as good as mine.

Posted by Bruce Lemieux

This entry was posted on Sunday, February 8th, 2009 at 7:58 am and is filed under Market Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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