Dear Friends and Neighbors,
It’s the end of July, and I am admittedly a bit late in writing the 2nd Quarter Report. My apologies to all who have been eagerly and patiently waiting to reading it! My excuse - a wonderful family trip to Fiji and Australia! I hope you are taking advantage of the summer months to spend some quality time with your family and loved ones, as well.
Down to business! As someone who’s been tracking numbers in our market for years, I’ve noticed that typically 50% of all real estate transactions (contracts written) occur between March 1st and June 30th of any given year. If this rule of thumb is relevant to 2017, we are going to end the year with a slightly lower number of transactions, perhaps 10-15% lower, than 2016. While nationwide new home sales are up as the overall economy continues to strengthen, in Bethesda-Chevy Chase and Potomac, we’re seeing less re-sale transactions, which can be attributed mostly to low inventory levels. The good news to sellers, home prices are trending up.
In Bethesda, there were 262 transactional contracts on detached homes during the 2nd quarter. In comparison, there were 296 contracts during the same period in 2016, that’s an 11.5% drop. During the first quarter of 2017, there were 231 contracts, nearly half of those occurred in March! Spring typically comes early and the rush of the Spring market begins.
The median sold price of detached homes in Bethesda in Q2 2017 was $1,000,000. That’s a 2.6% increase from the same period in the previous year. Median Days on Market (DOM) was 12 days, same as in 2016, but a big drop compared with the median DOM during Q1 2017, which stood at 32 days.
Chevy Chase is a smaller market, but a very healthy one. Overall in Q2 2017, there were 76 new contracts, up nearly 36% from Q1 2017. However, similarly to Bethesda, this is a drop of 13.6% compared with the number of contracts written in Q2 2016. This didn’t stop the median detached home sale price to increase by 10.6% to $1,250,000 compared with the median sold price in Q2 2016. That’s a big jump, but I will caution you not to conclude that overall real estate values in Chevy Chase increased 10% year to year, as that is not necessarily the case. We need to wait and compare various annual data to make any conclusions. As far as DOM in Chevy Chase, Q2 was basically “anxiety free” for all sellers, with a median of only 7 Days on Market. Wow!
In Potomac, once again a 14% decrease in the number of contracts written in Q2 2017 versus same period in 2016. Only 154 contracts for detached homes compared to 179 in 2016. The silver lining is that market activity during the 2nd quarter in Potomac picked up compared with the 1st quarter. Indeed we saw a 40% increase in number of contracts, from 110 to 154. Median DOM was 16, and median sold price was $1,012,000, which represents an 8.9% increase from 2nd quarter data in 2016.
The new custom and spec home market in Bethesda-Chevy Chase continues to thrive. While some among us have the impression that there are many new homes “sitting on the market” that is already saturated, the numbers tell a different story. So far in 2017, there are 45 spec homes (not including custom homes) in Bethesda alone, either under contract or already sold. Additionally, there are 35 spec homes currently active on the market and I’m sure a few more will hit the market before years’ end. The average DOM (list date to contract date) is less than 60 days! The average Sold Price YTD is $1,800,000. In comparison, in all of 2016, 91 new spec homes were sold (in Bethesda alone), the average DOM was 74, and the average Sold Price was $1,667,000. It’s noteworthy that the new spec home market in Chevy Chase is doing as well as in Bethesda, while in Potomac, it’s almost non-existent (1 sold in 2017 to-date).
Looking ahead for the remainder of 2017, I’m hoping for steadiness! No sudden movements, anyone… while there’s the looming threat of larger forces in our environment creating a “black swan-like” event, I am hopeful that we are stronger economically and that we will continue to thrive in our micro market and withstand uncertainties.
On that optimistic note, I want to thank you for reading and also thank you for your continued support! Galanti Group is growing and, as always, if you have any real estate needs, please do not hesitate to reach out. We are here to assist and provide exceptional service to you!
All the best,