Rise in Montgomery Home Prices Among Highest in Region
Market expected to pick up in spring
The median sales price for a house in Montgomery County in 2018 was up 4.8 percent from 2017, an increase matched only by Fairfax City, Virginia, in the Washington region, according to new data and analysis.
Montgomery County’s median sales price for December — $421,000 – also outpaced December 2017s by more than $10,000, according to the report from real estate listing service Bright MLS.
The movement in the market is tied to supply and demand, Bright Client Alliance Manager Adam Iobst said.
“What we’re seeing in this report is a continued trend, and that is in general lower inventory,” Iobst said. “There’s less houses on the market, and that’s causing prices to continue to slowly increase.”
On a month-to-month comparison, the Washington area had a December median home price of $445,000, up 5.9 percent from December 2017. This was the highest December level of the decade, the report said.
Only Alexandria, Virginia, saw increases in year-over-year sales volume, and Montgomery County fell 4.3 percent to 12,312 homes sold.
The county had a bump in year-to-year inventory levels, up 5.1 percent to 1,649 homes. This could lead to a slight increase in properties for sale in the early spring, said Iobst, with the warmer weather kicking off the busy sales season.
“Typically in the winter months things tend to slow down quite a bit, it’s a seasonal trend we’ve expected and continue to see every year,” Iobst said. “The spring market starts picking up March, April, and that’s really going to give us a better sense of how things are going to perform this year.”
As for buying preferences, single-family homes are growing in popularity, Iobst said, adding that professionals in the field have been waiting for the next generation of home buyers to emerge.
It appears they have arrived, bringing a shift in purchasing decisions.
“A lot of buyers are now buying single-family houses right now, it’s almost as if they’ve skipped that starter home and just went right into single-family homes with a focus on single-family detached homes,” Iobst said.
Interest rates always play a factor but shouldn’t be a prohibiting factor in the spring, former Greater Capital Area Association of Realtors President Peg Mancuso said.
“They’re holding the interest rates because of all the other volatility in order not to impact our real estate market,” Mancuso said. “That’s a good thing, I think home purchases are affordable with these 30-year rates.”
Mancuso attributed the decline in year-over-year sales to stock market volatility and the government shutdown.
The GCAAR anticipated a slow December, but believe sales will pick up in the coming months.
“I expect a really good spring market,” Mancuso. “We’ve started to have the phone ring and we’re very busy.”
In a separate report released Thursday on regional sales trends in December, GCAAR found inventory is up with 1,241 active listings at month’s end, 16.1 percent more than at the same point last year.
Sale activity in December 2018 declined for single-family detached, single-family attached, and condominiums compared to December 2017.