Potomac, Maryland, Realtors Report Slight Hesitation In Housing Market
Potomac, Maryland, Realtors say they see no signs of a real estate bubble, and that sales continue to be strong, despite a slight degree of hesitation from buyers. "People outside of real estate keep talking about a bubble burst," says Realtor Michael Zuo. "Well, I see no sign of that in Potomac. The continued demands for housing in the area, regardless of home price, have produced multiple contracts and price escalations. Buyers are continuing to face appraisal contingencies being countered and/or struck from contract content in order to obtain ratification. The market is gearing up for a strong summer season with all indications that the seller's market will continue." Says Realtor Eric D. Young, "Despite speculation of a housing bubble reported in various local and national media outlets, the Washington, DC market continued to be strong in May, reaching the highest combined monthly sales total in this report's fifteen-year history. Led by a record month on the condominium/cooperative side, sales of single-family homes, condos, and co-ops were up 11 percent from April and up 6 percent from May of 2004 (the previous record month). Through May, record condo/co-op sales have offset losses in the low end of the single-family side to boost combined sales 4 percent ahead of the same point last year. Combined sales are also up 12 percent from 2003 and 18 percent from 2002. The inventory of homes and units is at the highest point of the year, but the combined effective inventory (inventory divided by the number of new contracts) is an extremely low 1.1 months. By comparison, the national figure is approximately 4 months." He continues, "While the record monthly sales totals may focus attention on the condo/co-op market, average price gains are actually higher on the single-family side (17 percent vs. 15 percent), demonstrating the strength of the D.C. housing market across the board." Sales of single-family homes priced over $300,000 continued their strong growth in 2005 with new contracts in May up 20 percent from a year ago and up nearly 23 percent compared with the first five months of 2004. On the other hand, sales of homes below $300,000 continued to fall sharply -- down 58 percent for the month and 51 percent for the year-to-date. The net result is that sales in May of all single-family homes trail each of the last four years by margins of 1 percent to 8 percent while year-to-date sales trail each of the last five years by margins of 1 percent to 7 percent. The major cause of this mixed picture is available inventory. Homes over $300,000 benefited from a 13 percent growth in new listings compared to May of 2004 and a total active inventory that is also 13 percent higher than a year ago. Conversely, for homes under $300,000, new listings are down 50 percent for the month and 40 percent for the year-to-date. These lower priced homes still make up 21 percent of the total sales picture, but only 12 months ago they constituted 40 percent of the Washington market." "Some houses are starting to sit on the market slightly longer even in Potomac," observes Realtor Yvette Chisholm. "Overall, Montgomery County is feeling the market hesitate. Short-term interest rates have risen, but long-term rates are very low and that is fueling the market. With lower levels of inventory available, there is a lot of competition in prestigious Potomac, Maryland. The well-priced homes in great condition are selling briskly and the good homes are selling quickly. The average days on market is still about 20 percent less than the average of all of Montgomery County." |
