September 7th, 2009 Categories: Market Updates
Analyzing year-to-year trends for the Montgomery County real estate market is a real challenge with the highs and lows that we’ve seen over the last five years. As we enter the fall market I believe that a comparison to last year’s activity tells us a lot about our market and where it’s headed for the rest of the year.
Brisk, Blazing with Strong Momentum
After a tentative start, monthly transaction volume in Montgomery County got stronger and stronger as the year progressed. After reaching a peak in April, last year’s market activity slowly declined into the winter. Not this year. Transactions kept chugging peaking in July with 61% more contracts than July of 2008. I expect we’ll see overall activity reduce each month through year-end, but the overall momentum will continue into the Fall with brisk activity compared to last year.
Breathtaking, Blistering, Crazy-wild
Your experience as a buyer or seller in Montgomery County is very different based on your price and location. Our market has been blistering for entry level homes. To see how price affects our market, I separated contract activity by list price: $400K and lower, and over $4ooK. The market for homes $400K and lower has been crazy-wild. High rates of distress sales have slammed prices lower finally putting home-ownership in the reach of many. This with a combination of low interest rates, relatively strong employment and possibly the $8,000 tax credit (I’m just not convinced how this has driven sales) have resulted in a buyer’s feeding frenzy. Take a look at July’s activity which was two times the activity for July 2008. Breathtaking.
The market for homes priced over $400K in Montgomery County hasn’t fared as well. Contract activity for the first three months this year was down more than 20% compared to last year. Fresh momentum over the last several months will hopefully continue into the Fall. So far for the year, volume is down only 3% for the year. The absence of move-up buyers and higher down-payment requirements are keeping a lid on market activity for more expensive homes.
Overall, a combination of low inventory, low interest rates and strong employment bode well for a strong finish for our 2009 real estate market. For now, at least, it looks like the stomach-churning stock market swings and worries about the collapse of our financial markets are behind us. Higher confidence in our real estate market and the overall economy will help move buyers off of the side-lines.
Contact us with questions about the real estate market in Montgomery County and how it would affect your plans to buy or sell here in the coming months.