Summer 2019 Market Report

It’s mid-summer, and we have had an incredible run thus far in the local real estate market. We’ll get to the numbers and stats in a minute, but first, I thought I’d bring you some of the most recent headlines from leading national publications and news outlets about the real estate market:

These 6 headlines alone, not counting hundreds of others, are enough to make your head spin and have you scrambling to make sense of it all! My simplified take on it to buyers and sellers in our market, or any other market for that matter… barring any major event that will send the U.S. economy into a recession, let your life events and life goals drive your decision when it comes to buying/selling your primary residence. Our local economy has its own cycle, but overall it remains steady. When drilling down and looking specifically into each “micro-economy” within the DC area, both in terms of geographic area and in price category, trends may look and behave differently. In other words, national and regional trends may have limited effect, if any.

Last week, I wrote about the Federal Reserve’s decision to drop the rate by 0.25% – the first rate drop in more than a decade. In the background, the trade-war with China has reached a new level, with the U.S. labeling China a currency manipulator, and Wall Street reacting in panic (as traders tend to do), producing the 7th largest 1-day drop in DOW’s history, a 760 point plunge. The rate drop has caused a 12% spike in mortgage refinancing applications, but we have not seen any change in new home purchases, as mortgage rates are already low and have been low for a while.

With that in mind, lets see what has happened in 2019 so far (January through July) in the Bethesda, Chevy Chase, and Potomac markets, and put it in local context.

Under $1,000,000

Further looking at the market in different price categories, specifically in Bethesda-Chevy Chase (not including Potomac), 332 homes priced under $1,000,000 have sold YTD (including currently pending transactions), representing 45% of the total market activity. This segment, as anticipated, outperforms the overall detached home market with 98.4% Sold to Original List Price Ratio and an average 40 Days on Market. Take note that less than 50 homes (so far this year), have sold under $700,000. To put things in prospective, this number in 2010 was 161 for the same period – that’s a 70% drop! Bethesda-Chevy Chase continues its upward pricing trend, becoming less and less affordable.

$1,000,000 – $1,500,000

Next up is the $1,000,000 to $1,500,000 price category, with 240 YTD contracts, representing 32% of the overall market activity, averaging 53 DOM and yielding 98.5% Sold to Original List Price Ratio.

$1,500,000 – $2,000,000

There were 111 contracts entered in the $1,500,000 to $2,000,000 price category. This segment represents 15% of the overall detached home market. The DOM jumped to 89 and the Original List Price Ratio dropped to 96.6%. By the way, a third of the homes in this price category are new construction homes.

$2,000,000 & Above

The $2,000,000+ price category in Bethesda-Chevy Chase represents 8% of the overall market. DOM further jumped to 133 Days, while the Sold to sold-to-original list Price Ratio landed at 96.5%. Of these 60 homes, 18 of them (30%) are new construction in-fill homes.

What we learn from this most recent market data is that our market, for the most part, has been persistently predictable. Our market data tracking shows that over the last several years, the overall market has behaved in a consistent pattern, with modest ups and downs trending with the changing seasons, and very modest year-to-year appreciation, despite continuously low inventory levels (in a historic view).

I hope you are having a fantastic summer! 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.

All the best.

Read as PDF