I honestly don’t know how I feel about 2018. I need more time to process the government is partially shut down, the stock market had the worst December since the Great Depression (yes!), the Fall season in real estate proved to be challenging, my sciatica is acting up again, and it’s really, really cold and windy outside.
On the flip side, unemployment in the U.S. is at its lowest level since 1969, consumer confidence is near it’s highest level in two decades, economic growth is up, and the poverty level is down! On a personal note, we had an amazing celebration of my daughter’s Bat Mitzvah in Israel this summer, and we just spent three wonderful days in Florida where it was 80 degrees and sunny! Business-wise, Galanti Group had a record year in terms of sales, our team grew, and our future growth looks brighter than ever. Our team, together with our colleague-agents at Compass, have sold over $3 Billion in real estate and represented clients in nearly 5,000 transactions across the area. Impressive.
Big Picture in The Greater Washington Metro Area:
In 2018, total sales volume has declined by 2% in DC, 1.5% in Northern Virginia, and 1.7% in Montgomery County, compared to 2017 figures (mostly due to weak performance in the last 6 months of the year, more about that later). At the same time, median prices climbed by 1.8% in DC, 1.7% in Northern Virginia, and 2.5% in Montgomery County compared to the prior year.
Single Family Home Market:
Taking a closer look at the detached home market in Bethesda, Chevy Chase, Potomac, and NW DC, we find that the median home price has increased in 2018 compared with 2017 in three of the four markets. In Bethesda, the median home price increased by 3.3% and the Sold to Original List Price Ratio rose by 0.7%. In Chevy Chase, the median price increased by 7.7% from $1,165,000 in 2017 to $1,255,250 in 2018. The NW DC median price rose by 4.5%, while in Potomac it stayed steady at $990,000.
In contrast, in New York City, the median residential property price fell for the first time since 2015 to just under $1,000,000, and overall home sales in 2018 fell 14% compared to 2017.
Still, the data in our area is mixed. In Bethesda and Chevy Chase, for example, the overall home sales fell by 6% annually. This drop can be attributed to an especially weak market in the second half of the year, where overall sales dropped by 12.5% compared with the same period in 2017!
Here is the data based on contracts entered in 2018, including closed and pending transactions, in all price ranges:
Defining the Luxury Home Market:
It’s no secret that Luxury is an illusive term. It’s also no secret that home prices in our area have been on the rise since the early 2000’s, with the exception of the great recession of 2007-2009. The term Luxury Home is being thrown a lot – sometimes associated with a specific neighborhood, often referring to a the quality of finishes and the range of amenities. I have decided for this addition of our market report, to take a closer look at homes (excluding condos), in the four sub-markets.
Before we break it down, it’s worth noting that the number of homes sold in Bethesda above $2,300,000 has increased by nearly 30% compared with 2013 (5 years ago); 50% more in Chevy Chase, and 27% in the District of Columbia. Only Potomac saw a drop of 35% in the number of homes sold at $2.3MM and over.
One common theme – expect to be on the market for a while, as the pool of buyers shrinks dramatically the higher up you go in price.
*of closed transactions | † 1 property pending | ‡ 3 properties pending
New Construction Homes:
As of right now, there are 38 new construction spec homes on the market in all of Bethesda-Chevy Chase. On average, these homes have been on the market 143 days and counting. Lowest priced home is $1,299,000, highest is priced at $7,500,000. Median asking price is $1,797,000.
In 2018, only 83 new spec homes were sold in Bethesda-Chevy Chase (including pending sales, excluding custom homes and private sales), representing a major 24% decrease compared with 110 new home sales in 2017. The Median sold price was $1,725,000 with an average of 202 days on the market and 97.1% Sold to List Price Ratio.
Transactions by Month:
I am often asked, “When is the best time to sell?” While there’s no definite answer to this question, as it all depends on circumstances from the stock market to the weather, competition, interest rates, what a certain President may or may not do, etc., there are trends that can be tracked and offer a general guideline. According to the 2018 data, the months with the most transactions were April, May, March, June, February and October, in that order.
We certainly felt a shift in the market in late spring and into the summer. It was noticeable change and the numbers confirm, buyers chose to hold off, resulting in 12.5% drop in number of transactions during the last 6 months of 2018 compared with the same period in 2017!
I want to thank you for reading and also wish you all the best for 2019! As always, if you have any real estate needs, please do not hesitate to reach out. It will be my pleasure to offer my guidance and services and tailor a plan that fits you, your home, and your goals.
Call us for a free, no-obligation consultation. Doesn’t matter if you’re one month or two years away from selling your home – get expert advice and start thinking about what steps you can take to have a successful, stress-free selling experience.
All the best.
