September 5th, 2010 Categories: Market Updates
Just as I posted my analysis of pending sales, I sat down to breakfast with the Washington Post. Timely enough, it reported that Montgomery County’s pending sales for July was down 22% from 2009, and a staggering 29% from June. According to my analysis, July’s sales were down 14% from 2009, and down only 6% from June 2010. That’s a huge discrepancy. The Post’s article (by the way, I love the Washington Post) indicates a market in free fall. My analysis suggests a market that’s still stagnate, and possibly getting a little better. Who’s right?
I sent the following email to Dina ElBoghdady to help see who’s off the ranch. I hope it’s not me!
I enjoyed your article in the Post this morning (Sunday 9/5). As a real estate agent focused on Montgomery County, I can’t reconcile your stats. I don’t believe they are as bad as reported.
Yesterday, I extracted all 2010 contracts in Montgomery County (properties with a status of Sold, Contract, Contract/No Kickout, Contract/Kickout) for 2010 and compared them to 2009. When evaluating the health of our real estate market, I always look at ‘Contract Date’ since that’s the best indicator of the market at that point in time.
In July, we had 930 contracts vs. 1084 for 2009 – a 14% decrease. June 2010 had 994 – a 6.4% decrease. Your article has a 22% decrease from July 2009, and 29% decrease from June 2010. This is a significant discrepancy. According to your graph, George Mason based their numbers on data from MRIS. I’m looking at the same data and can’t come up with these numbers. I also looked at the ‘Close’ date and got counts for July: 1,800 in 2009, 1,528 in 2010 – a 15% reduction.
I am definitely seeing a higher level of anxiety from sellers and caution from buyers, but I don’t see a market in decline, but rather one that’s pretty flat. Here’s a snapshot that I just completed looking at contracts through the end of August. Overall for 2010, Montgomery County is up 8% in contracts, and contracts in August are up compared to 2009. The tax credit definitely affected the market. I don’t believe the credit brought more buyers into the market, but rather moved purchased forward.
Here’s my assessment of the Montgomery County real estate market. I don’t see a declining market as suggested by your stats, but I see a market — much like the economy — that is getting better, but not by much. A slight improvement from 2009 isn’t a great prize since 2009 wasn’t so good.
Let me know what you think. If anything, I would definitely have someone review GMs stats. I apologize in advance if I’ve got it wrong, but I don’t see how.