It’s summertime! While many in Washington are in vacation mode, we are busy thinking about real estate! It’s been an interesting year so far with all sorts of ups and downs some are rational, some not so much. Sellers and buyers in today’s market are going through either very similar or completely opposite experiences. We’ll try to make sense of it all while sharing with you interesting market data. Here we go:
During the first 6 months of 2018, 944 detached homes have entered the market for sale in all of B-CC. At the same time, we have had 644 contracts, meaning less than 68% of the inventory was sold, (the actual figure is even lower when taking into account the inventory that existed from late 2017).
It seems 2018 so far has been kinder to sellers than 2017 where during the same 6-month period 994 homes entered the market, approximately 5% higher than in 2018 while only 632 went under contract, meaning 63% of the available inventory, again, not taking into account the homes that were already on the market from fall 2016.
Overall in our market we have greater inventory than demand. Good news for buyers! And indeed, more often we see price reductions (roughly 40% of the inventory), and price cut negotiations. Having said that, certain neighborhoods have greater appeal than others and certain price points are more in demand. To that last point, Bethesda and Chevy Chase are steadily becoming less affordable as the number of homes under $1MM is shrinking fast. I have compared the number of homes available in 2018 at certain price categories to the availability of these homes in 2008 – the results may surprise you:
As you can see, there are virtually no homes available under $500K and the ones that are close to that price point are typically tear-down homes. The number of homes available between $500K and $750K have dropped by 60% from 175 in 2008 to only 71 in 2018. The next big shift occurred in the homes priced between $1MM and $1.5MM where the number of homes in the category increased by 60% from 126 in 2008 to 202 in 2018.
Looking specifically at zip codes 20817, 20814, and 20815, here’s a breakdown of number of homes to enter the market by month, vs number of contracts entered, and average Days On Market (DOM) tracker per month. The data is fairly consistent with previous years whereby March, April and May are the biggest “listing” months and, as expected, the most productive contract months. This is also reflected in the DOM average and in the “sold to list price” ratio, which is at its highest during the spring season.
Notice the unusually high DOM in January, a reflection of “leftover” fall inventory, a good portion of which have dropped their price or have agreed to negotiate lower sale price.
As you can see, there are virtually no homes available under $500K and the ones that are close to that price point are typically tear-down homes. The number of homes available between $500K and $750K have dropped by 60% from 175 in 2008 to only 71 in 2018. The next big shift occurred in the homes priced between $1MM and $1.5MM where the number of homes in the category increased by 60% from 126 in 2008 to 202 in 2018.
Looking specifically at zip codes 20817, 20814, and 20815, here’s a breakdown of number of homes to enter the market by month, vs number of contracts entered, and average Days On Market (DOM) tracker per month. The data is fairly consistent with previous years whereby March, April and May are the biggest “listing” months and, as expected, the most productive contract months. This is also reflected in the DOM average and in the “sold to list price” ratio, which is at its highest during the spring season.
Notice the unusually high DOM in January, a reflection of “leftover” fall inventory, a good portion of which have dropped their price or have agreed to negotiate lower sale price.
