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MoCo Areas
- Bethesda
- Clarksburg
- Darnestown
- Gaithersburg
- Germantown
- North Potomac
- Olney
- Poolesville
- Potomac
- Rockville
- Silver Spring
Article Topics
Past Articles
- August 2010 (3)
- July 2010 (8)
- June 2010 (22)
- May 2010 (15)
- April 2010 (4)
- March 2010 (5)
- February 2010 (3)
- January 2010 (8)
- December 2009 (53)
- November 2009 (4)
- October 2009 (5)
- September 2009 (4)
- August 2009 (21)
- July 2009 (6)
- June 2009 (14)
- May 2009 (6)
- April 2009 (5)
- March 2009 (3)
- February 2009 (7)
- January 2009 (8)
- December 2008 (5)
- November 2008 (8)
Market Stats
Montgomery County Housing Inventory for August
August 22nd, 2010 Categories: Market Updates
Our monthly snapshot of housing inventory shows that the number of available homes for August is just about the same as last month with 4,110 homes. The inventory of distressed homes (bank-owned properties and short sales) makes up about 1/3 of the total which is the highest for the year.
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Montgomery County Inventory Continues to Climb
July 15th, 2010 Categories: Market Updates
This month’s check on available housing in Montgomery County shows that inventory continues to climb. For the first time this year, this month’s inventory exceeds 2009’s level. For qualified buyers, the mix of higher selection of homes and rock bottom interest rates make it a great time to buy.
[August 22, 2010 - I caught an error in calculation of the number of distress inventory which should be at 1,177 homes - or 28% of the total, not 20%. Sorry about that.]
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Montgomery County Contract Trends
July 10th, 2010 Categories: Market Updates
Last month I summarized the rate of contracts by week just after the federal home buyer tax credit expired. Contract activity soared as the deadline approached, then plummeted the following weeks. My theory: I don’t believe the credit brought many new buyers into the market, but rather encouraged buyers to simply accelerate their purchases. The three most important factors driving home sales are affordability, interest rates and jobs. Right now, all three of these factors are favorable in Montgomery County.
An update of contracts through the end of June is shown below. Contracts have trended up since the beginning of May. As we enter the hot, summer sales season, I would expect contract activity to begin trending down again as it does in a normal (whatever that is) year.
Contact us anytime with questions about our local market in Montgomery County.
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Montgomery County Real Estate Trending to a Buyer’s Market
June 17th, 2010 Categories: Market Updates
After a crazy-busy spring market with 30% increase in contracts compared to 2009, the most current statistics indicate that buyers will soon be back in the drivers’ seat as available inventory jumps up while contract activity cools down.
Inventory in Montgomery County steadily declined every month in 2009 through early 2010. Then in March, tons of new homes came on the market. Luckily for many sellers, so did the contract activity. Now, new homes continue to be added to the market while buyer activity wanes. With super low interest rates and a larger selection of homes, home buyers are in a great position to negotiate a great deal on a home purchase.
[August 22, 2010 - I caught an error in calculation of the number of distress inventory which should be at 1,071 homes - or 26% of the total, not 19%. Sorry about that.]
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Detailed View of Montgomery County Contract Activity
June 14th, 2010 Categories: Market Updates
Compared to 2009, home sales have increased in all areas of Montgomery County and in all price ranges so far in 2010.
See this overview for each area in Montgomery County:
- Bethesda, Chevy Chase and Kensington
- Clarksburg and Damascus
- Germantown and Boyds
- Darnestown
- Gaithersburg, Derwood and Montgomery Village
- North Potomac
- Olney, Ashton, Brookeville and Sandy Spring
- Poolesville and the Ag Reserve
- Potomac
- Rockville and North Bethesda
- Silver Spring, Takoma Park and Burtonsville
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Montgomery County Contracts by Price
June 6th, 2010 Categories: Market Updates
“How has the first time buyer and move-up tax credit affected the market?” We get this question a lot. My feeling is that the credit created a ‘cash for clunkers effect’ motivating buyers to make home purchases earlier than they would have normally made. A look at overall contract activity by week clearly shows buyers rushing to make the deadline.
Since the credit phases out for purchase over $800K and buyers with higher income, I took a look at contracts by price range:
As expected, the more expensive the home, the lower the impact. In the coming days I’ll provide updates for each area of Montgomery County. Contact us anytime for specific questions about our real estate market.
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Montgomery County Inventory Is Climbing
May 29th, 2010 Categories: Market Updates
We’ve been super busy over the last couple of months with buyers and sellers, so I haven’t made market update recently. And the market has changed a lot this spring. Total inventory has jumped up quite a bit. Here’s a snapshot taken mid May:
The total distress inventory continues to trend down. And since ‘normal’ inventory has jumped up, distress inventory is a smaller percentage of the total. Inventory tells only part of the story. Next up: spring contract activity.
[August 22, 2010 - I caught an error in calculation of the number of distress inventory which should be at 953 homes - or 25% of the total, not 17%. Sorry about that.]
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Spring Contract Activity for Montgomery County
May 29th, 2010 Categories: Market Updates
Here’s a snapshot of a summary of weekly contract activity for Montgomery County. Compared to 2009, contract activity is up 20% so far compared to last year. The year started out strong, took a pause during Snowmageddon 2010, and then roared to the tax credit deadline on April 30th. Now, the market is taking a breather.
Contact us if you have questions about specific areas and price ranges in Montgomery County, Maryland.
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Montgomery County’s Real Estate Market is Looking Up
March 19th, 2010 Categories: Market Updates
As the snow has melted, our real estate market is starting to bloom. I’ve planned to report detailed stats for Montgomery County, but we’ve been so busy with buyers and sellers that I haven’t found the time. Showing activity has definitely picked-up and we’re seeing multiple contracts for our buyers and sellers. Inventory is still low, but that’s improving as well. Here’s a snapshot from mid-March:
This is the first time in we’ve seen inventory go up over the last 14 months. The number of distressed properties has remained about the same, but is now a smaller percentage of the total inventory.
I’m excited about analyzing the actual sales activity over the last few months. From our experience, activity is definitely ‘up’. It will be interesting to see how all areas and price ranges are doing. Contact us if you have any specific questions about your areas of interest.
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Montgomery County Inventory in February
February 20th, 2010 Categories: Market Updates
This month’s check on inventory looks a lot like January’s inventory. The number of homes on the market is 41% lower than February 2009, and distress inventory (foreclosures and shortsales) represent 18% of the homes on the market.
In the coming weeks, I’ll report on the number of contracts for 2010. By now I really expected to see an early spring market with many more homes entering the market, but the back-to-back blizzards effectively shut-down all real estate activity for early Feb. We’re speaking to a surge of buyers and sellers who are are ready to go, so I really expect March to be a busy month for real estate.
Contact us if you have specific questions about the market or are thinking about buying or selling in Montgomery County.
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Montgomery County Inventory for January
January 23rd, 2010 Categories: Market Updates
Available housing inventory for Montgomery County continued to shrink – down over 41% from January 2009, and 3.6% lower than the mid-December snapshot. The number of distress sales inched up a little from December. With lower overall inventory, distress sales as a percentage of the total is higher at 31%.
See All Homes for Sale in Montgomery County. Contact us anytime for questions about our market.
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Montgomery County Real Estate 2009 Year in Review
January 3rd, 2010 Categories: Market Updates
We’re already three days into 2010, but it’s not too late for a quick review of the Montgomery County’s real estate market for 2009. Although I wouldn’t call today’s market “normal”, our market definitely stabilized this year. Here’s some interesting stats for the year.
Most expensive sale in Montgomery County
According to our MLS, 9109 Harrington Drive in Potomac was the most expensive home sold in Montgomery County closing for $7,810,000. This Bradley Farms home featured 10 bedrooms, 11 full baths, an elegant interior and nearly 7 acres. It was originally priced at $11.8M when it entered the market in February, 2009. The home was listed with Washington Fine Properties.
Most expensive sale in the Metro D.C. area
211 Chain Bridge Road in McLean, Virginia sold in February for $16,000,000. This cozy cottage was completed in 2008, overlooks the Potomac River and features over 25,000 square feet of living space including 8 bedrooms, 9 full baths, 5 half baths, 5 car garage, indoor pool, indoor basketball court and elegant spaces for stylish entertaining. This custom estate was purchased by the Embassy of the State of Qatar.
Least expensive home sold in Montgomery County
Montgomery County has only a few mobile homes. When 19515 Frederick Road #191 in Germantown sold for $22,900 in July, it became the lowest priced sale for the entire County. Buying a home under $100,000 was unheard of a few years ago. In 2009, 245 homes sold for $100,000 or less. Our area is known for its high housing costs. In 2009, 72% of all homes were sold for $500,000 or less:
Number of Sales over $2M
The market for upper bracket homes was soft in 2009 with 64 homes selling for over $2M. With 103 homes available for sale, there’s currently over 1 year and 7 month’s inventory. Looking at the last ten years, 2009’s sales were less than half sold during the market’s peak in 2006. The graph below shows all resales and does not include many new homes constructed during this period which I roughly estimate to be around 400 homes.
Most popular zip codes
Sales in the following 10 zip codes made up over 52% of the sales for the entire county. Here’s a summary of each zip with the number of homes sold in 2009:
Zip codes with the highest sales volume
Sales volume is the product of the sales price and transaction volume. Montgomery County had over $4.4 billion in 2009 sales. Nearly 60% of the sales took place in the following 10 zip codes:
Zip codes with the hottest sellers markets
This is a measure of the area with the lowest inventory which is simply the number of homes available divided by the number of homes sold. This isn’t the definitive measure of an area’s real estate market. Looking at homes within an area and price range is a much better measure. Still, here’s 10 zip codes with the lowest inventory.
| Zip Code | Sold | Available | Inventory | |
| 20851 Rockville | 153 | 19 | 1.5 months | |
| 20877 Gaithersburg | 346 | 55 | 1.9 months | |
| 20879 Gaithersburg | 378 | 62 | 2.0 months | |
| 20814 Bethesda | 346 | 57 | 2.0 months | |
| 20855 Derwood | 140 | 24 | 2.1 months | |
| 20876 Germantown | 296 | 53 | 2.1 months | |
| 20874 Germantown | 806 | 152 | 2.3 months | |
| 20816 Bethesda | 233 | 44 | 2.3 months | |
| 20878 Gaithersburg | 650 | 126 | 2.3 months | |
| 20886 Montgomery Village | 494 | 97 | 2.4 months |
Zip codes with the hottest buyers markets
The higher the inventory, the bigger selection for homes buyers. Here’s the top 10 zip codes with the highest inventory in Montgomery County.
| Zip Code | Sold | Available | Inventory | |
| 20837 Poolesville | 46 | 23 | 6.0 months | |
| 20882 Gaithersburg | 109 | 54 | 5.9 months | |
| 20833 Brookeville | 48 | 19 | 4.8 months | |
| 20866 Burtonsville | 140 | 53 | 4.5 months | |
| 20906 Silver Spring | 785 | 296 | 4.5 months | |
| 20872 Damascus | 132 | 48 | 4.4 months | |
| 20871 Clarksburg | 184 | 64 | 4.2 months | |
| 20854 Potomac | 459 | 151 | 3.9 months | |
| 20905 Silver Spring | 144 | 47 | 3.9 months | |
| 20815 Chevy Chase | 327 | 96 | 3.5 months |
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Potomac Neighborhood Past Sales
January 2nd, 2010 Categories: Market Updates, Potomac
Not counting the last couple days of 2009, 451 homes sold for nearly $440 million in Potomac, Maryland. 2009 past sales for the most popular neighborhoods in Potomac can be accessed below. Check them out and let us know what you think. Contact us for information on these or other Potomac neighborhoods not listed here.
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Montgomery County Real Estate Market Update for December 2009
December 17th, 2009 Categories: Market Updates
Overall inventory of available homes in Montgomery County continues to dissolve dropping over 7% from mid November; down 39% for the year. The very small pool of available homes is really making it tough for buyers to find homes that meet their needs.
The total number of distress sales inched up a bit, but has been flat for the last several months. Transaction volume was still high in November compare to last year, but it’s trending down as we expect this time of year.
Buyers and sellers are anticipating the coming Spring market. Low interest rates and low inventory set the stage for a healthy — dare I say “normal” — market in early 2010. If you are planning a move, contact us so we can help you get ready.
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Past Sales for Potomac, North Potomac and Darnestown
December 9th, 2009 Categories: Market Updates
Detailed past sales for 2009 have been posted for the following areas and neighborhoods. Past sales are updated here periodically. Contact us if you would like to see current past sales for your areas of interest.
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November Housing Inventory Update for Montgomery County
November 21st, 2009 Categories: Market Updates
How low can you go? That’s the question for housing inventory in Montgomery County. Total available homes dropped 6.5% from mid-October. For the year, inventory is down over 34%. The total number of distress sales has been flat over the last couple of months. Since total inventory has shrunk, distress inventory is a larger part of the total – about 27%.
Compared to 2008, transaction volume is blazing. Volume in October was nearly double last years’.
Some of these contracts won’t go to closing, but this still shows that our market is hot compared to 2009. Prices have come down this year, but just about all price ranges have seen increased activity. Are we reaching the “bottom” of the real estate market? These stats tell me “absolutely”. Low Inventory + High Sales Volume = Higher Home Values. The only exception would be for our most expensive homes. Here’s a view of this year’s sales activity by price range compared to 2008:
Low interest rates and shrinking inventory have a big impact on buyers and sellers. Buyers looking for lots of bargains will be surprised to find fewer homes in the bargain bin. Sellers in many market segments can hold out out for higher prices compared to even just a few months ago.
Contact us if you are planning to buy or sell in Montgomery County in the coming months. Understanding the market dynamics in your particular area and price range is critical to get the most from your home sale or purchase.
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Montgomery County Real Estate Market Overview for October
October 18th, 2009 Categories: Market Updates
A mid-month snapshot of Montgomery County inventory shows that housing inventory continues to shrink, although at a smaller rate than for earlier months. During the course of a month, homes enter the market increasing inventory. Inventory is reduced when homes go under contract and when home sellers give up and remove their home from the market. With this in mind, looking only at inventory won’t reveal a complete view of the market, but it is a critical measure. Declining inventory results in fewer options for buyers and less competition for sellers. Here’s the overview:
Another important metric is the contract activity. Compared to last year, overall contract activity continues to be robust:
From last month’s review of contract activity, we see that a home’s price range is a big factor in a home’s demand. Also, comparing this snapshot of contracts with September’s, you’ll notice that the number of contracts for previous months was revised down. Why’s that? Once a home goes under contract, the buyer and seller must then get to settlement. In the coming days, I’ll post an article that walks through this process and how a contract can get derailed.
Your comments are always welcome below. Contact us anytime for any questions about the Montgomery County real estate market.
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Montgomery County Inventory for September
September 14th, 2009 Categories: Market Updates
A mid-September snapshot of available homes in Montgomery County shows that the trend of declining housing inventory continues. This time last month, there were 3,435 homes on the market in Montgomery County. Now there’s 3,376 – a 1.7% reduction. For all practical purposes, this month’s inventory is flat from last month. The total number of estimated distress sales is 820 down from 867 last month – a reduction of 5.4%. If you are in the market for a home right now, it’s easy to be frustrated by the lack of fresh, new homes. I’m finding that very nice, well-priced homes go quick.
Will inventory continue to dwindle through year end? I think so. I believe that inventory will stay flat or drift at current levels through the end of January. For sellers, this can be a great time to enter the market given the low level of competing properties.
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Fall Real Estate Market Forecast for Montgomery County
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.
Tentative, Recovering
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.
Year-end Prediction
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.
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Montgomery County Housing Inventory
August 20th, 2009 Categories: Market Updates
It’s time for the mid month look at Montgomery County’s housing inventory. Our housing supply continues to shrink. Total inventory is down 27% from January. The total inventory of distress properties is down 30%. Distress properties continue to make up 25% of available inventory — consistent with the last several months. Here’s the cart:
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Montgomery County Real Estate at a Glance
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.
| Rank | Zip | Town | Contracts | |
| 1 | 20874 | Germantown | 560 | |
| 2 | 20906 | Silver Spring | 508 | |
| 3 | 20878 | North Potomac | 412 | |
| 4 | 20886 | Montgomery Village | 347 | |
| 5 | 20902 | Silver Spring | 316 | |
| 6 | 20850 | Rockville | 299 | |
| 7 | 20854 | Potomac | 294 | |
| 8 | 20817 | Bethesda | 281 | |
| 9 | 20852 | Rockville | 252 | |
| 10 | 20904 | Silver Spring | 247 |
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.
| Rank | Zip | Town | Volume | |
| 1 | 20854 | Potomac | $296,762,870 | |
| 2 | 20817 | Bethesda | $244,509,978 | |
| 3 | 20878 | North Potomac | $185,556,956 | |
| 4 | 20815 | Chevy Chase | $164,488,335 | |
| 5 | 20850 | Rockville | $153,502,467 | |
| 6 | 20814 | Bethesda | $145,868,926 | |
| 7 | 20874 | Germantown | $143,920,817 | |
| 8 | 20906 | Silver Spring | $127,107,461 | |
| 9 | 20816 | Bethesda | $113,446,000 | |
| 10 | 20852 | Rockville | $113,186,796 |
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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| Do you have questions about the Montgomery County real estate market? Call us at 301-527-9079 or send an email for more info about buying, selling and living in Montgomery County, Maryland. | |
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Montgomery County Inventory Melting Away
July 18th, 2009 Categories: Market Updates
As a kid, the Wicked Witch of the West and her troop of flying monkeys terrified me. I thought of Ms. West when looking at this month’s stats. For a home seller, excessive inventory of available homes is pure evil that results in lower sale prices and longer days on the market. I find that high inventory also erodes buyer confidence. Motivated buyers can stay on the sidelines when they continue to see lots of homes that aren’t selling. “Once I buy, would I ever be able to sell?” they think. As homes start selling, more buyers get in the market. I think we’re seeing that happen here.
Every month this year we’ve seen inventory melt away. From mid June to mid July, total inventory went down 15%. For the year, inventory is down over 22%. We only have about 3,600 available homes for all of Montgomery County. This isn’t a big number for an area of this size. The number of distress sales has also declined – down 25% for the year. This is a good sign for our market as excess inventory and distress sales have consistently trended down this year.
So if the Wicked Witch of the West is playing the part of high inventory, who’s playing the part of Dorthy who slays her nemesis with a bucket of water? I think Dorthy would be the buyers and investors (mainly buyers) who are aggressively buying up lower priced homes. They are soaking up homes priced under $700K — especially those priced under $400K. Due to unfavorable financing, Dorthy isn’t doing much to reduce the inventory of our most expensive homes, so Ms. West can take her pick of many fine upper bracket homes in Potomac that has lots of room for pets.
OK, the usefulness of this Oz metaphor is unraveling fast, but let’s add one more character: The Good Witch. Really low interest rates would be the benevolent presence hovering above helping drive these purchases. The Federal Reserve has been aggressive and creative to keep mortgage rates super low. This isn’t the only factor helping our market, of course. A relatively strong local economy and lower prices play a huge role. But since Ben Bernanke looks pretty good in a pink, puffy dress with wings, we’ll give him the part.
I’ve run out of creativity required to match up the other Oz characters with our real estate market. If you are inspired, add a comment with your thoughts.
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| Do you have questions about the Montgomery County real estate market? Call us at 301-527-9079 or send an email for more info about buying, selling and living in Montgomery County, Maryland. | |
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Metro D.C. Unemployment Up in 2009
July 7th, 2009 Categories: Market Updates
A strong job market is essential for a healthy real estate market. The metro D.C. area continues to have the lowest unemployment of the largest 15 metropolitan areas in the U.S. Compared to unemployment in November, however, the stats show that we’re not immune to job losses experienced throughout the country.
A higher jobless rate can drive up the rate of foreclosures. And, with fewer jobs we see fewer job relocations which reduce the number of new home buyers coming into the area .
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| Do you have questions about the Montgomery County real estate market? Call us at 301-527-9079 or send an email for more info about buying, selling and living in Montgomery County, Maryland. | |
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Montgomery County Market Update
June 28th, 2009 Categories: Market Updates
We’re halfway into 2009 so it’s a great time to take a look at the real estate market in Montgomery County. Especially compared to other areas, our overall market is very healthy. Here’s an overview of the inventory and the number of contracts over the last six month by price range for all home types in the County.
What’s hot in the County? Single family homes priced under $400,000 and townhomes in all price points under $700,000 have three months or less available inventory. There’s 2 months or less inventory in the following areas and price points:
- Bethesda - Homes priced $600,000 to $700,000
- North Potomac – Homes priced $600,000 to $800,000
- Potomac – Homes Priced under $600,000
- Olney – Homes Priced $300,000 to $400,000
- Germantown – Homes priced $300,000 to $500,000
What’s not? Inventory is relatively high for all condos in all price points. Also, higher-priced homes in all areas are having a tough time finding buyers.
Charts showing activity by different home types and links to each area are added at the end of this article. Several powerful forces are shaping our real estate market which help explain how some market segments are doing better than others.
Distress Sales
Especially for entry level homes, short sales and foreclosures are the driving force reducing prices and putting home ownership within reach for many. As a result, transaction volume for entry-level homes has been on fire this year. Foreclosures have pressured home prices down in most segments of our market.
Financing – The Good
Mortgage rates this year are at historical lows. We may never see fixed rates this low for a long time. Many economists predict higher inflation as the economy gets back on its feet. If this prophecy comes true, many buyers will look back at 2009 wishing they had locked-in on a purchase.
The increase of the conforming jumbo limit in Montgomery County to $729,750 was a boon to well-qualified buyers who were challenged with higher down-payments requirements. FHA loans are available up to this amount and only require a 3.5% down-payment. The combination of low rates, a low down-payment and lower prices have dramatically improved the affordability of most of our market segments.
Financing – The Bad
Mortgage providers are being more selective and are requiring more cash. The higher the mortgage amount, the higher the required percentage of money down. This really isn’t a ‘bad’ thing, but higher down payment requirements are putting more expensive homes out of reach for buyers. Right now, a buyer can find loans under $1M with 15% to 20% down. At $1.5M, banks require 30% or more. That’s a lot of cash – cash many buyers don’t have right now.
Strong Employment
Although unemployment has inched-up here, we still have the strongest job market in the country. A diverse, service-oriented economy will keep our overall real estate market healthy for the foreseeable future.
Declining Inventory
Perhaps the most under-reported aspect of our market is that overall inventory continues to shrink. If a home owner doesn’t have a strong need to sell, they are staying put. As a result, we are seeing strong seller markets in surprising places fueled by a lack of available homes.
Overview by Area
Here’s a breakdown of the overall statistics for the County by area:
- Bethesda
- Potomac
- North Potomac
- Darnestown
- Rockville
- Gaithersburg
- Germantown
- Poolesville
- Clarksburg
- Olney
- Silver Spring
Overview by Home Type
Here’s a breakdown of the County statistics for single family homes:
As expected, most townhome activity is concentrated in the lower price points. The market strength for more expensive townhomes priced under $900,000 may be a surprise.
The market for condos is weaker in all price points. Financing is tougher requiring higher down-payments and condo fees make them less affordable.
Post a comment and let me know what do you think. Do these stats reinforce your view of the market, or do you see a different story?
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Montgomery County inventory dwindles with a jump in distress sales
June 15th, 2009 Categories: Market Updates
Looking at a mid-June snapshot of our market, overall inventory for available homes in Montgomery County continues to trend down — 10% below January’s inventory. The number of distress sales, however, spiked up to over 1,000 units to about 25% of the total.
The obvious question is “what drove this spike in distress inventory?” A jump in interest rates would have an impact, but I would expect this to impact all buying activity — not just distress sales — so I don’t expect this to be the culprit.
I believe that the jump in distress sales is attributed to two factors. First, actions taken by federal and state government suspended foreclosure proceedings earlier this year. I believe this created a mini surge of foreclosures that we’re finally seeing.
Also, I see many more regular home sales with realistic sales prices. Nice homes priced right are going quick in many market segments. As summer gets in full swing, we typically see activity slow down — fewer contracts and fewer new homes on the market. Here’s a snapshot of contracts in Montgomery County this year:
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Housing inventory continues to shrink in Montgomery County
May 24th, 2009 Categories: Market Updates
Does it seem like there are fewer homes available in Montgomery County? Jeannette and I have had the same feeling while working with our buyers over the last several weeks. A snapshot of housing inventory confirms that supply continues to shrink. From mid April to mid May, the total inventory of available homes went down to just over 4,300 homes – a reduction of 5%. The number of distress and bank properties went down even more – down 13% from last month.
I absolutely do believe that we’ve found a bottom for entry level homes in Montgomery County. We’ve seen sustained transaction volume there and distress properties are definitely being removed from the market. Anecdotally, I feel like the market for homes in the $500Ks to $600Ks are firming up as well. This is definitely the case in North Potomac, Darnestown and Germantown. I’ll run some stats soon to see if the data backs me up on this.
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Tour of home prices in Montgomery County
May 8th, 2009 Categories: Buying, Market Updates
Where should I buy in Montgomery County?
That’s easy. Where do you work? What kind of home would you like? And how much do you want to spend? OK, so it’s not so easy. For most of our buyers, the desire for a close-in, commuter-friendly location and finding the right home at the right price can be tough to reconcile.
To help give a more complete view of what’s available in Montgomery County, I took a snapshot of all homes available and organized them by their distance to Washington D.C. Starting ‘closer in’ and then moving out, I’ll provide an overview of what you can expect in each area of the County.
Here’s a summary of stats referenced in the video. All prices are list or asking prices from a snapshot of data taken in April, 2009.
Neighborhoods within 10 Miles of The National Mall
| Area | Units | Median | Min Price | Max Price | |
| Bethesda | 426 | $949,000 | $150,000 | $10,750,000 | |
| Chevy Chase | 157 | $1,234,500 | $195,000 | $4,975,000 | |
| Kensington | 92 | $485,000 | $141,000 | $1,999,999 | |
| Silver Spring | 385 | $350,000 | $85,000 | $1,900,000 | |
| Takoma Park | 54 | $299,000 | $124,500 | $949,500 |
10 to 20 Miles Out
| Area | Units | Median | Min Price | Max Price | |
| Potomac | 291 | $1,375,000 | $410,000 | $9,900,000 | |
| North Potomac | 194 | $449,999 | $89,800 | $1,595,000 | |
| Darnestown | 46 | $850,000 | $525,000 | $2,900,000 | |
| Rockville | 439 | $398,000 | $130,000 | $1,899,000 | |
| Gaithersburg | 210 | $235,000 | $47,900 | $850,000 | |
| Montgomery Village | 206 | $170,000 | $60,000 | $649,000 | |
| Derwood | 59 | $479,000 | $200,000 | $1,900,000 | |
| Olney | 74 | $481,500 | $179,000 | $2,599,000 | |
| Silver Spring | 810 | $275,000 | $42,900 | $1,900,000 | |
| Burtonsville | 61 | $290,000 | $174,900 | $850,000 |
Over 20 Miles Out
| Area | Units | Median | Min Price | Max Price | |
| Poolesville | 33 | $550,000 | $180,000 | $3,950,000 | |
| Boyds | 32 | $550,000 | $175,000 | $1,557,000 | |
| Germantown | 328 | $250,000 | $95,900 | $1,695,000 | |
| Clarksburg | 98 | $469,900 | $144,900 | $1,190,000 | |
| Damascus | 56 | $385,000 | $150,000 | $1,299,000 | |
| G’burg/Laytonsville | 129 | $450,000 | $124,900 | $2,600,000 |
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Montgomery County inventory of distressed properties evaporating
April 13th, 2009 Categories: Market Updates
Taking a snapshot at total inventory in Montgomery County, inventory of distress sales continues its downward spiral. The drivers: low prices and low interest rates. Most activity is still taking place at the lower end of the market.
Will this trend continue? I think so. Employment is still relatively strong and rates are expected to stay low for months. With dwindling supplies of ‘bargain’ homes, I would expect to see more multiple contracts on the best deals.
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Should you offer $1M on a $1.2M listing?
April 10th, 2009 Categories: Buying, Market Updates
How low can I go when making a purchase offer?
I get this question a lot these days. I took a detailed look at all sales for 2008 and provided an analysis for list-to-sales price ratios for Montgomery County. This provided a good overview for the County, but it left basic questions unanswered:
- How does a home’s ‘days on market’ impact reductions?
- Can a buyer get bigger reductions on more expensive homes?
- Does the available inventory affect price reductions?
In this article, we’ll drill into the statistics and get some answers.
Overall Statistics for Montgomery County
Before we start digging into the numbers, let’s look at a break-down of sales-to-list reductions for Montgomery County for closed sales that went under contract after October 1st, 2008 through April 1st, 2009. To get a true picture of price reductions, sales prices were reduced by buyer credits (so if a home listed for $700,000 sold for $700,000 with a $10,000 credit, $690,000 would be used as the sales price). Here’s the breakdown:
The average sales-to-list price for all closed properties was 95% or a 5% reduction. A summary of homes selling for:
- Asking price or more – 14% of total
- Up to 3% reduction – 22%
- 3% to 5% reduction – 21%
- 5% to 8% reduction – 22%
- Over 8% – 21%
So based on these stats, is a $200,000 reduction (17%) on a $1.2M listing realistic? Only about 3% of these sales had reductions of 17% or more, so your odds are pretty slim. How about a $100,000 (8%) reduction? Your odds are much better. Over 26% of these homes sold with a reduction of 8% or more.
Price Reductions and Days on Market
The longer a home is on the market, the more motivated the seller, right? Seems logical. Let’s break down this data by the number of days on market:
The trend is clear: a buyer has better odds of larger reductions for homes that have been available for a longer period of time. For homes on the market more than 90 days, about 29% sold for reductions of 9% or more.
Price Reductions, Home Price and Inventory
I have to admit, there’s usually a point in processing stats like this when my eyes start to blur. The purpose of this type of analysis is to provide clarity on the market – not confusion – so I’ll spare you the sight of another graph.
For homes priced over $900,000, home reductions are greater. 37% of these homes sold with reductions of 9% more. But price alone isn’t the driver, but rather available inventory. Inventory is highest in the upper brackets with over two years’ available homes — significantly higher than for lower priced homes.
Conclusion: The higher the inventory, the greater the buyer’s leverage.
The Bottom Line
After all that, what do you do when making a purchase offer? Go really low? Offer close to asking price? Here’s some guidelines:
- Look at recent comparable sales — similar homes that have *sold* in the surrounding area (not the *asking* price for similar homes). This is your baseline.
- Understand available inventory. The higher the inventory, pressure will continue to push values downward. Even if the home is well-priced and there’s more than 12 months available inventory, then you need to go in lower.
- If your home of interest has been on the market a while, your odds of negotiating a more aggressive reduction are greater.
- If homes are moving and it’s price right, then you better act quick or you may miss out.
Above all – make sure you stay focused on finding a home that fits your needs and make a purchase that you can live with.
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2009 Real Estate Survival Guide for Montgomery County
February 17th, 2009 Categories: Market Updates
Even though we’re about six weeks into 2009, the upcoming Spring market heralds the “real” start of our real estate market. Although buyers and sellers are being continually battered by bad news, know that homes are still selling in Montgomery County. In fact, more homes sold the 2nd half of 2008 compared to the same period in 2007 in Montgomery County. Still, expect 2009 to be a rocky year. Here’s a quick guide to help navigate our market.
Employment
People can’t buy homes without having jobs. The Washington D.C. Metro area has the lowest unemployment rate of the 15 largest metro areas at 4.4% in November inching up to 4.7% in December (the national average is over 6.5%). According to the Center for Regional Analysis, we actually expect to see an increase in jobs for the region. This is definitely good news for our housing market. We’ll keep an eye on unemployment rates throughout the year.
Mortgage Rates
Rates for mortgages under $625,000 are around 5% in our area giving buyers more buying power. With the signing of the federal stimulus package today, the conforming jumbo limit will be increased to $729,750 in the coming weeks. It’s a different story for jumbo loans. Rates are higher and can vary quite a bit between lenders. By shopping around, we’re still seeing clients get good rates. With all loans, buyers need good credit and must be well qualified to get approval. We expect rates to stay low for the year.
Distress Sales
This is a good news/bad news story. A large number of foreclosures and distress sales bring prices down for everyone. The good news – according to RealtyTrac and others, it appears that subprime foreclosures may have peaked. The bad news – we estimate that 25% of all available homes on the market in Montgomery County are distress listings or are bank-owned. Also, some expect a new wave of “no doc” and “Alt-A” loan foreclosures. Until this inventory is reduced, we’ll continue to see downward pricing pressure in some segments of our market.
Confidence and Fear
Not long ago, homeowners readily moved-up to bigger/better homes confident their current homes would sell. Buyers jumped into the market and quickly paid list price and more. How things have changed. Rightfully so, many buyers are simply too fearful to make a purchase. If you have a secure job and have long-term plans for a home, then it’s a great time to buy. But recent events in the stock market, news of job losses and bad housing reports are strong headwinds to resist. We’ll know that confidence is returning when we see increases in contracts and declines in available inventory.
Having an experienced guide is the key to make it through today’s turbulent market. Contact us anytime for help to get the most out of your home sale or purchase.
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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.
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January’s sales activity: the good and the bad
February 6th, 2009 Categories: Market Updates
Home sales statistics for the last four months for Montgomery County are a good-news-bad-news story. Let’s start with the good news.
- Compared to the last four months this time last year, overall sales activity increased over 7%.
- As a sign that buyers may be starting to shake off their buying blues, contracts for December and January were much stronger up 28% and 13% respectively.
Sounds great! So what’s the bad news?
Pricing continues to be pressured downward which is good or bad depending if you are buying or selling. Clearly this is bad news for home sellers with little or no equity, and for retirees with a need to sell right now. Continued downward pricing pressure increases distress sales and foreclosures which is bad for everyone. For buyers and local move-ups, this is good news as homes are more affordable.
The number of contracts by listing price clearly tells the story. Buyers are dealing at lower prices:
OK – back to the good news. Overall, I believe the increase in home contracts is a very good sign for our real estate market. It tells us that buyers and sellers in Montgomery County are still coming together. And, with low interest rates and stable employment, we could soon see price stability this year.
I’ll followup with posts looking at specific areas in the county. If you are ready to buy in today’s market, see all homes for sale in Montgomery County. Contact us anytime if you would like more information on the value of your home or neighborhood.
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Our job market measures-up pretty well
January 25th, 2009 Categories: Market Updates
First the mortgage meltdown in the fall of 2007. Then, the financial crisis. Now companies are laying off scores of employees driving up the unemployment rate. This last hit can be a killer for a real estate market. You aren’t going to buy a home if you don’t have a job. But all areas in the U.S. are not affected the same way. The Washington D.C. job market is a bright spot in a the national economy.
Of the 15 largest metropolitan areas, the Washington D.C. area had the lowest unemployment rate at 4.4% in November, 2008 according to the Bureau of Labor Statistics and the Center for Regional Analysis. The national average was 6.5%.
The CRA even expects the region to add jobs in 2009, although some job sectors will see net losses. They estimate that around 31,000 jobs were added from November 2007 to November 2008. Here’s the sectors that did the best:
- Professional and Business Services: +10,800 jobs
- State and Local Government: +10,700 jobs
- Education and Health Services: +9,400 jobs
- Other Services: +8,100 jobs
- Federal Government: +4,800 jobs
- Leisure and Hospitality: +1,400 jobs
- Transportation and Utilities: +600 jobs
Job sectors that lost jobs:
- Construction: -5,300 jobs
- Financial Services: -3,300 jobs
- Information: -2,800 jobs
- Retail Trade: -2,000 jobs
- Manufacturing: -1,100 jobs
Historically our area has weathered economic downturns pretty well. Today’s environment is unlike anything that most of us have seen, however, so we will definitely be keeping a close eye on our job market this year. More than anything else, local employment is the bedrock of our housing market.
Do you feel the metro D.C. area has a job base that’s strong enough to pull us through? Make a comment and let us know your views.
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Distress Sales in Montgomery County – How bad is it?
January 18th, 2009 Categories: Foreclosures, Market Updates
Just about every day passes with another statistic about area foreclosures. News snippets rarely provide a good perspective on our local market, so we took a detailed look at the total number of bank-owned and distress listings on the market in Montgomery County. As posted in December, we saw signs of an improving market with an increase in the number of contracts the 2nd half of 2008 compared to 2007. However, until distress and bank properties are reduced to a smaller percentage of available inventory, we’ll continue to see downward pricing pressure.
What is a Distress Sale?
A distress sale is one that requires approval from a homeowner’s mortgage provider(s) for a payoff smaller than the outstanding mortgage balance. These listings are commonly noted to require “third party approval”. No single source provides an accurate count of distress sales, so in mid-January we worked with our home search technology company to obtain counts of all listings in Montgomery County that have descriptions that likely indicate a distress sale or are bank-owned. These numbers will not be exact, but they are pretty close.
Distress and Bank Sales by Area
Looking at all listings, about 25% of all homes available in Montgomery County are bank-owned or distress sales. This is a big number. Some areas in the county are affected much more than others as shown in the graph below.
The percentage of distress listings within each area is summarized in the table below. Also, the area’s distress listings as a percentage of the total for the County is shown. 59% of all available listings are located in Silver Spring, Gaithersburg and Germantown areas, yet these areas contain 76% of all distress listings for Montgomery County.
| Area | % in Area | % of County | |
| Bethesda, Chevy Chase, Kensington Clarksburg, Damascus Gaithersburg, Derwood, Mont. Village Germantown, Boyds North Potomac Olney, Ashton, Brinklow, Sandy Spring Poolesville, Dickerson, Barnesville Potomac Rockville, North Bethesda Silver Spring, Burtsonsville, Takoma Park |
4% 29% 43% 42% 25% 13% 8% 5% 24% 29% |
2% 7% 25% 13% 4% 1% 0% 1% 8% 39% |
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Over the coming months I’ll revisit these metrics hoping to see a reduction in the inventory of distress listings. Declining inventory of distress listings will be a clear sign that our local real estate market is stabilizing. Contact us anytime with questions about how these sales have an impact on your areas of interest.
How do you feel about the market? Make a comment and let us know.
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More signs of stability
December 16th, 2008 Categories: Market Updates
“When will we hit bottom?” We get that question a lot from home buyers and sellers in Montgomery County. I think a better question is “When will the local real estate market stabilize?”. There won’t be a specific date that marks this transformation, but we will observe a time period with increased home sales and a stablization of the inventory of available homes. Two observations tell me that we are seeing signs of a more stable market.
The first good sign is increasing sales activity for entry-level homes in our market. From my post in late November, we are seeing very brisk buying activity compared to last year. This segment of the market is dominated by distress sales and bank-owned properties. I expect that distress sales will still be prevalent here in 2009, but the substantial increase in purchases compared to 2007 is definitely an encouraging sign that we’re finding a floor.
The other statistic that shows promise is the number of contracts in Montgomery County for the 2nd half of this year. I like looking at the number of contracts because it is a very simple, easy-to-understand barometer of our market. An increase in the number of sales is a clear indication of an improving market. Compared to 2007, the total number of contracts from January to June in 2008 was down 25%. It seems like a long time ago, but the credit crisis really began in the fall of 2007. With sky-high gas prices and gloomy consumer sentiment, the 1st half of the year was a real downer. The 2nd half of the year, however, has shown improvement.
As prices look more attractive to buyers, and as interest rates continue to lower, I feel positive that we’ll continue to see improvements in our market during the first half of 2009.
What do you think? Are you starting to feel a little more bullish on our local real estate market? Or, are you still bearish? Make a comment and let us know your thoughts.
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And the most popular price for a Montgomery County home is…
November 26th, 2008 Categories: Market Updates
For people relocating to Montgomery County, buyers can get mixed messages about our true home values. Most entry level housing is priced from $300,000 to $500,000. Looking at total sales volume, the volume of homes sold up to $500,000 is about the same has homes selling from $500,000 to $1,000,000. Of course, we also have multi-million dollar sales as well.
At least twice a year, we’ll speak to buyers relocating from Texas where you can buy an all-brick home with 4,000 square feet of living space and a pool for $400,000 — not something that you’ll find here. For those relocating from California or New York, our home values are not so much of a shock.
The charts below give an overview of the sales activity across the entire county. In later posts, I’ll show how homes are “typically” priced in different areas on our County. If you are new to the area, what are your impressions of our market? Make a comment and let us know!
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Three-times the sales compared to last year? Isn’t this a slow market?
November 20th, 2008 Categories: Foreclosures, Germantown, Market Updates, Silver Spring
Entry-level housing in Montgomery County is heating-up. Looking at the last four weeks, the number of contracts in many parts of Montgomery County is more than tripled compared to this time last year for homes priced under $300,000. As inventory has climbed, foreclosures and distress sales have applied downward pressure on prices in this segment.
So is this a harbinger that we’re reaching the illusive “bottom” of the real estate market? To me, it’s clear this is a sign that demand for homes in Montgomery County is fundamentally strong. For most people who live and work here, a home purchase has simply been too expensive. As prices have come down, homes are now within reach to more people. So it’s a great sign that buyers are getting into the market in such a turbulent time. Still, there’s many homes on the market. For the nine zip codes included in the chart, there are nearly 1,400 homes available in that price range. If the sales volume continues to increase over the next several months as new homes enter the market, then we can be more confident that we’re finding the floor in our market.
What trends do you see for entry level housing in Montgomery County? Are you beginning to be hopeful, or do you see harder times ahead? Add a comment and let me know your thoughts.
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Montgomery County weekly market update
November 18th, 2008 Categories: Market Updates
Here’s the first weekly snapshot the current real estate market for Montgomery County, Maryland. There are some trends that stand out:
- For the four weeks from October 20th through November 16th, 668 homes went under contract. This is a healthy 15% higher than the 579 sales during the same period in 2007.
- Over twice has many homes listed below $300,000 sold in this period compared to last year. Unit sales for higher price ranges were lower reflecting continued downward price pressures.
- Although the number of unit sales was higher, the total list price for these contracts was down 11% — $278 million vs $311 million in 2007. This is a lot of sales, but there’s also of available inventory available.
- There are 5,083 homes available for purchase for a total list price of $2.9 billion dollars — about 7.0 months of inventory.
Charts below summarize an overview of the last four weeks. Generally speaking, the ‘closer in’ to Washington D.C. a home is, the more expensive it will be. Activity for homes priced over $800,000 has declined the most in both units and total volume.
Contracts 4 Weeks from October 20th through November 16th
Available Inventory by Area and Price Range
As you look around your neighborhood, to these trends reflect what you are seeing? Add a comment and let us know.
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