End of Year Report 2016
Happy New Year! Don’t you just love this time of year?! I don’t - it’s too cold! So, 2016 is behind us (phew) and now that we’ve celebrated the holidays and welcomed 2017, it’s time to look back, summarize and analyze the year... but just in real estate! I wouldn’t think to take on everything else that happened in the last 12 months (though I’m tempted). But before we jump in, allow me a second to recognize that it’s been a little over a year since we launched Galanti Group. Thank you for your ongoing support, I am very grateful. I’m happy to say that it’s been a fantastic year and we are growing and expanding, as we welcomed three new agents to the team - Peggy Bresler, Illia Schwarz, and Diego Sito.
Now on to business. If you’ve been reading my quarterly reports, you know by now that 2016 has been mostly the year of no thrills (again, just in real estate). There were no big surprises, no big dips or surges, as buyer and seller activity, as well as home prices, were for the most part stable. In general, properties in Bethesda, Chevy Chase, Potomac, and Upper NW kept their value with pockets of modest appreciation.
I’d like to start with new construction homes as an indicator of the overall health of the market and the confidence new homes builders have in our market. In 2016, 100 new homes were sold in all of Bethesda-Chevy Chase (90 in Bethesda, 10 in Chevy Chase). This represents a healthy 16.3% increase in the number of new homes sold compared with 2015. It’s worth noting that, in actuality, the number was higher by an estimated 8-12%, but those extra sales were never reported in the MLS (private sales).
37 homes were listed between $1,200,000 and $1,500,000. On average, the Sold to Original List Price Ratio (SLR) was 97.36%, and the average Days on Market (DOM) was 131. 44 of the homes (44%) were listed between $1.5M and $2.0M with an average of 168 DOM and average of 96.05% SLR. The remaining 19 homes were listed over $2.0M and had an average of 175 DOM and 92.6% SLR.
Here’s an interesting fact: in 2010, as the market was starting to recover from the great recession, the number of new detached homes sold in zips 20814, 20815, and 20817 was 42! That’s a 138% jump in 6 years!
My expectation is that this segment of the market will slow down in 2017 as builders are getting more conservative and less speculative. The 2016 increased activity is really a reflection of the confidence builders had in the market in 2015 (since it takes about 1 year from the time a builder purchases a lot to when the new house enters the market).
Zip Code 20815, Chevy Chase, Detached Homes: 2016 was virtually the same as 2015, with the exception of average home price. The number of homes sold was 261, same as in 2015. The average DOM fell to 58, down from 61. The Sold to Original List Price Ratio (SLR) was 95.8%, whereas in 2015 it was 95.65%. The average home price (sold) was $1.268M which is 5.3% less than 2015. The lowest detached home list price in Chevy Chase was $450,000. The highest priced home was listed for $4.3M.
Zip Code 20817, Bethesda, Detached Homes: 20817 was not as active in 2016 with 431 units sold, compared with 462 homes sold in 2015, a 7.2% decline in overall activity. The average DOM climbed to 76 days, which is a 13.4% increase. The average home price was $1.185M slightly higher than 2015’s $1.162M, and lastly, the SLR went down half a percent to 95.07%. Lowest priced home was $515,000 and the highest priced home was $5M.Zip code 20814, Bethesda, Detached Homes:
Here, too, the data shows similarities to 2015 market data. The number of homes sold in 2016 was 207 compared with 205 in 2015. The average DOM was 56, compared with 55 in the previous year. The big difference was the average Sold to List Price (SLR). In 2016 the ratio stood at 94.46% which is lower by 2 percentage points compared with 2015’s 96.43%. The lowest price of a detached property in 20814 was $560,000 while the highest was $7.995M. That property, 7118 Glenbrook Rd, was the highest property to be listed in 2016 in all of B-CC. It was sold for $6.5M, that’s 81.25% of list price.Zip 20854, Potomac, Detached Homes:
Potomac saw increased activity with 462 homes sold during the year, representing a 4.5% increase. The average DOM climbed modestly to 83 days, compared with 79 days in 2015. The average list price stayed virtually unchanged at $1.127M. Where the Potomac market is significantly different than the B-CC market, is that the average Sold to Original List Price Ratio is at 92.6%. This means that, on average, a seller asking for $1M would, on average, sell the property for $926,000. To illustrate this point, the highest priced property in Potomac in 2016 was 13331 Signal Tree Ln. originally offered at $8,750,000, sold for $5,450,000 – a 62.3% SLR.Bethesda Condo Market:
The number of condo units sold in 2016 (excluding town homes), was 236, 19% higher than that of 2015! The average DOM also climbed, from 48 days to 64 days, a 33% increase. Similarly, the average unit price increased by 12.8% to $536,500. All of these changes can be attributed to the new ultra-luxury condo buildings in Bethesda. In 2015, about 30% of all condo inventory was sold at or above $1,000,000, wherein 2016, the number of condos priced and sold over $1M jumped by 53% to 26 units. We can expect this trend to continue with the condo offerings in buildings such as Hampden Row, The Lauren, Cheval, and Stonehall.
Looking ahead, 2017 has all the potential to be a great year in real estate. The DC Metro area continues to boast low unemployment, steady growth, positive migration of talent, and of course high-incomes. With the new Administration and new Congress prioritizing overhaul of the tax code and focus on domestic economic growth, a promise of increased consumer confidence and subsequent spending is looming. And, while interest rates are rising, the increases are modest, with rates still considered low and attractive. In a sense, the rate hikes might actually get buyers who’ve been on the fence to finally make a decision to buy. Thank you for reading and thank you for your continued support! We wish you and your loved ones a happy, healthy, and prosperous 2017! If you have any real estate needs, please do not hesitate to reach out - we are here to assist and provide exceptional and reliable guidance. Best, Avi