Monday, December 22, 2008
State of the real estate market in North Bethesda
As in other areas of the country, prices are declining in our DC Metro area. Fall and early winter are often "slow" seasons for real estate sales, as people are focusing on getting children in school and gathering for the holidays. However, there are still buyers looking for good properties, and the buyers who are looking during this season are serious about purchasing. Many potential sellers are waiting for the "spring" market to list their homes, so the available housing inventory is now lower than it had been for the past two years. The combination of reduced attractive inventory and fewer, but more serious, buyers means that sales continue, with reduced volume of transactions. Here in North Bethesda, we have a variety of housing types, and the detached single family homes and newer townhouses have the advantage over the condominiums in this market. For the month of November, 2008, there were 51 single family and townhouse listings in the 20852 zipcode, with 101 condominium listings. Fourteen houses and ten condos went under contract in the same month. This gives an absorption rate of 27.5% for houses and 10% for condominiums. The absorption rate defines how much of the available inventory is removed (sold) in that time period. An absorption rate of about 30% is a reasonably balanced market between buyers and sellers, so the 27.5% rate for houses shows more strength in the market than we had previously. It is neither a sellers' nor a strong buyers' market for houses that are well kept and properly priced. Properly priced, for our area, means that the housing prices are roughly what they were in early 2005. The condo market, on the other hand, with a 10% absorption rate, is a strong buyers' market, so that, if the inventory is not reduced, prices will have to drop to create an environment in which buyers will be confident in making the commitment to buy.