August 6th, 2009 Categories: Market Updates
You’ve heard it a zillion times – real estate is local. Another common nugget of real estate wisdom – “location, location, location”. In Montgomery County, a home’s location and price range are the primary factors driving demand. To cut to the chase and provide a simple overview of our market, I analyzed all contracts from February through the end of July and compared sales activity. The results are summarized in the following chart:
Busiest Zip Codes in Montgomery County
Here’s the top 10 by the number of contracts ratified over the last six months. Activity in these zip codes represents 53% of all contracts for Montgomery County.
Here’s the top 10 zip codes for listing volume. This is total listing volume for homes under contract over the last six months. These zip codes represent 58% of the total volume for the county.
What’s the Overall Assessment?
Over the last six months, over 6,600 homes went under contract with a listing volume of $2.9 billion. That’s a lot of real estate. Over the same period in 2008 there were right at 4,850 contracts with a listing volume of just under $2.7 billion. That’s a huge jump in contracts – a 37% increase, yet with a listing volume increase of only 10%.
Every statistic that I’ve analyzed in 2009 clearly indicates to me that our real estate market is firming-up. With lower prices, favorable interest rates and a strong local economy, buyers are aggressively re-entering the market. A declining inventory of distress sales and overall inventory is also a strong indicator that we’ve reached the floor for our overall market.
The only exception to this rosy picture is the market for higher priced homes. When will this market segment improve? My theory — we need to see lower down payments for new mortgages. Down payments of 20%, 25% and 35% are requiring simply too much cash for many buyers. In the overall scheme of things, having high down payments is probably good for the long-term health of our market, but right now, it’s definitely stifling sales.
What’s your thoughts? Make a comment and let us know.
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