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North Potomac Market Update
June 28th, 2009 Categories: North Potomac
In an article from May, I was seeing a ton of demand for homes in North Potomac priced around $600,000. The chart below confirms this trend with less than two months’ inventory for homes priced from $600,000 to $800,000. Two factors are driving sales here: 1. motivated move-up buyers and 2. low available inventory. Two of our listings in North Potomac in this price range have attracted heavy showings and multiple offers. Buyers with low offers are losing out with such strong competition. They’ll insist that the market is so bad that any seller should jump on an offer 10% below asking price. This might be the case in other parts of the county, but not here in this price range.
As price creeps over $800,000, the demand gets softer. A buyer can get an FHA loan with only 3.5% down for mortgages under $730,000. Over that amount, buyers need more cash — 15 to 20%. The higher the loan amount, the higher the down payment percentage. Move-up buyers in the area can be challenged to come up with the extra cash especially if they have most of their cash locked-up in the equity of their current home. The stats for North Potomac vividly demonstrate this breaking point for financing a home much beyond the mid $700,000s.
These stats show inventory in late June 2009 and the number of contracts for the previous six months.
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