December: The Washington DC Metro Area Real Estate Market

These real estate markets reported record-setting activity in 2020, despite enduring a weaker spring market due to social distancing protocols.

The following analysis of the Washington, D.C. Metro housing markets has been prepared by Bright MLS and is based on December 2020 Bright MLS housing data.

In Summary:

  • In 2020, the total sales dollar volume for the D.C. metro reached $34.6 billion (+11.7%).
  • Total sales volume for the year (57,266) ended up 3.3%. Seven months of the year marked ten-year monthly highs.
  • New listing volume was essentially flat with 2019. Combined with strong buyer demand, it created the region’s tightest market on record.
  • The year saw buyers snap up homes across the metro area, as days on the market fell into the single digits for the first time (nine days).
  • In December, new pending sales showed an unprecedented year-over-year growth, up 30.3% in a traditionally slow month. It was the best gain for any month in the past ten years.


Existing-Home Sales Jump 4.3% to 6.85 Million in October

Key Highlights

  • Existing-home sales grew for the fifth consecutive month in October to a seasonally-adjusted annual rate of 6.85 million – up 4.3% from the prior month and 26.6% from one year ago.
  • The median existing-home price was $313,000, almost 16% more than in October 2019. Total housing inventory declined from the prior month and one year ago to 1.42 million, enough to last 2.5 months – a record low – at the current sales pace.
  • More than 7 in 10 homes sold in October 2020 – 72% – were on the market for less than a month.

Regionally

Existing-home sales in the South increased 3.2% to an annual rate of 2.91 million in October, up 26.5% from the same time one year ago. The median price in the South was $272,500, a 15.7% increase from a year ago.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Click for full NAR news release


‘Peculiar’ Economy to Stabilize in Second Half of 2021?

Leading economists say the labor, housing, and stock markets will reach crucial markers that will indicate the recovery’s progress. From NAR’s virtual Real Estate Forecast Summit, Dec. 10

Housing Market

The housing market has been a bright spot this year, though inventory is a challenge.  The problem, Berson says, isn’t just homebuilding and permitting but also getting prospective sellers to put their homes on the market. “Hopefully, people will feel good about strangers coming into their home once there’s a vaccine,” he said.  – Realtor Magazine

Click the link for more, source: ‘Peculiar’ Economy to Stabilize in Second Half of 2021?

CoreLogic – Three-Year Housing and Mortgage Outlook

  • 30-year fixed-rate loans to remain below 3% during early 2021 and average about 3.2% during the next three years.
  • Millennials will add substantial demand for housing over the next few years.
  • Home prices projected to rise in most metro areas, albeit slower than in recent years.

2020 was a truly unprecedented year. With it behind us, let’s look ahead at three housing market trends that are likely during the next three years.

Figure 1: Mortgage Rates Are Forecast to Remain Low

First, exceptionally low mortgage rates are likely to be around for an extended period. We expect 30-year fixed-rate loans to remain below 3% during early 2021 and average about 3.2% during the next three years. This would be nearly a percentage point lower than the average over the 2010-2019 decade. These low rates will provide an excellent opportunity for families with good credit to buy or refinance homes.

Figure 2: Large Demographic Tailwind Has Arrived

Second, Millennials will add substantial demand for housing over the next few years. Looking at America’s population by age, the largest numbers of Millennials are those aged 28 to 30. With 33 as the median age of recent first-time buyers, demographic forces will add an important tailwind to home-buying demand. In fact, we expect home sales relative to the housing stock, a measure of home “turnover”, in 2021 to 2023 to be above the average annual turnover rate of the prior two decades.

Figure 3: Home Price Forecast to Rise Slower than Last Decade

Third, we expect home prices to rise in most neighborhoods, albeit at a more modest pace than in recent years. Price appreciation is expected to average 2.5% per year during the next three years, compared with 4.8% per year during the prior decade. One reason for slower value growth is because we expect for-sale inventory will increase. 2020’s pandemic delayed new construction and led many prospective sellers to postpone listings. Once the coronavirus dissipates or a vaccine is widely available, we expect to see the number of new and existing homes listed for sale to rise, helping to ease price appreciation. One caveat: while we predict most communities will see gradual price growth, some metros that have been especially hard hit by the pandemic recession will likely have price declines.

Low mortgage rates, growing numbers of first-time buyers, and gradually rising home values are three housing market trends we expect during the next three years.
© 2020 CoreLogic, Inc. All rights reserved.


START TO FINISH – 406 DAYS, SO MANY GREAT THINGS HAVE COME WITH TIME AND PATIENCE

No it’s not the pandemic; there we can only follow safety precautions and hope.

Rather it’s one of my clients’ timeline to Sell and Buy during 2020. How did they go from a home of 9 yrs, with three school-aged children and two full time working parents into a new build that will suit their family for the next 20+ years during an unimaginable world wide pandemic? One step at a time.


We first connected on October 20, 2019. From there, we developed an individual step by step plan of ‘how to’ execute their real estate goals.
Following that plan led them to identifying the location, negotiating with the builder of their new home, and ratifying on Jan 1, 2020.
Coordinating with the builder, designers, lender and title resulted in closing on October 2, 2020, three months behind schedule due to pandemic related delays.

Then it was time to list their home of 9 years.

Despite being three months behind our original timeline, we referred back to the step by step plan we had created.
Without skipping a beat, my clients stuck to the plan and completed everything we had discussed to get the house ready for market.
We listed on a Thursday, ratified 5 days later on that Monday and closed in 21 days on November 30, 2020.


Homeownership Creates Wealth Even If That’s Not the Goal

3611 Perry Ave Kensington, MD 20895

What a beautiful day yesterday was to have a OPEN HOUSE. First in person Open I’ve held in months and buyers are out in droves. In our current market where listings and under contract in less than a week and inventory is under a month, buyers are committed to start building equity through ownership. – 3611 Perry Ave, Kensington MD 20895 *Contact me for local market area data and trends – Laurel

Homeowners who spent a lifetime working, raising families and paying mortgages have a greater net worth later in life. Among U.S. families who own rather than rent, a primary residence accounts for 90% of total wealth – and 99% for the bottom 20% of low-income owners.

WASHINGTON – Homeownership presents a great pathway to build wealth. Among all families, the ownership of a primary residence typically accounts for 90% of total wealth, based on the 2019 Survey of Consumer Finance data. Among those in the bottom 20% of the income percentile, it’s even more: The median value of holdings for a primary residence accounts for 99% of total family assets. For top earners, however – the top 10% income bracket – it’s 42%.

Housing wealth accumulation takes time. It’s built up slowly by paying off mortgage debt and through price appreciation. And while home prices can fall, prices tend to recover and go up over the long term. As of September 2020, the median sales price of existing home sales was $311,800 – a 35% gain since July 2006 when prices peaked at $230,000.

Nationally, a person who purchased a typical home 30 years ago gained about $283,000 as of the second quarter of 2020. Of the total wealth gain, 67% ($192,600) is from the price appreciation of 3.7% annually. Over a 10-year period, the wealth accumulation is $144,490, of which $114,233 (80%) is from price appreciation.

Nine of the top 10 metro areas with the largest housing wealth gains over a 10-year period were on the West Coast: San Jose-Sunnyvale-Sta. Clara; San Francisco-Oakland-Hayward; Anaheim-Sta. Ana-Irvine; San Diego-Carlsbad; Los-Angeles-Long Beach-Glendale; Seattle-Tacoma-Bellevue; Boulder, Colorado; Urban Honolulu, Hawaii; and Denver-Aurora Lakewood, Colorado. Naples-Immokalee-Marco Island rounds out the 10th.

However, in terms of home price appreciation and the rate of return (price appreciation less mortgage rate), the top metro areas are Cape Coral Fort-Myers, Florida; Grand Rapids, Michigan; Boise-City-Nampa, Idaho; Reno, Nevada; Port-St. Lucie, Florida; Las Vegas-Henderson-Paradise, Nevada; San Jose-Sunnyvale-Sta. Clara; Riverside-San Bernardino, California; Phoenix-Mesa-Scottsdale, Arizona; and Lakeland-Winter-Haven, Florida.

Copyright © 2020 National Association of Realtors® (NAR)


Existing-Home Sales Soar 9.4% to 6.5 Million in September

Key Highlights

  • Existing-home sales grew for the fourth consecutive month in September to a seasonally-adjusted annual rate of 6.54 million – up 9.4% from the prior month and nearly 21% from one year ago.
  • The median existing-home price was $311,800, almost 15% more than in September 2019. Total housing inventory declined from the prior month and one year ago to 1.47 million, enough to last 2.7 months – a record low – at the current sales pace.
  • More than 7 in 10 homes sold in September 2020 – 71% – were on the market for less than a month.

Regionally

Existing-home sales in the South increased 8.5% to an annual rate of 2.80 million in September, up 22.3% from the same time one year ago. The median price in the South was $266,900, a 13.0% increase from a year ago.

The National Association of Realtors® is America’s largest trade association, representing more than 1.4 million members involved in all aspects of the residential and commercial real estate industries.

Click for full NAR news release

September 2020 Real Estate Statistics – DC Metro Area

Where Are Home Values Headed Over the Next 12 Months?

As shelter-in-place orders were implemented earlier this year, many questioned what the shutdown would mean to the real estate market. Specifically, there was concern about home values. After years of rising home prices, would 2020 be the year this appreciation trend would come to a screeching halt? Even worse, would home values begin to depreciate?

Original forecasts modeled this uncertainty, and they ranged anywhere from home values gaining 3% (Zelman & Associates) to home values depreciating by more than 6% (CoreLogic).

However, as the year unfolded, it became clear that there would be little negative impact on the housing market. As Mark Fleming, Chief Economist at First American, recently revealed:

“The only major industry to display immunity to the economic impacts of the coronavirus is the housing market.”

Have prices continued to appreciate so far this year?

Last week, the Federal Housing Finance Agency (FHFA) released its latest Home Price Index. The report showed home prices actually rose 6.5% from the same time last year. FHFA also noted that price appreciation accelerated to record levels over the summer months:

What are the experts forecasting for home prices going forward?

Below is a graph of home price projections for the next year. Since the market has changed dramatically over the last few months, this graph shows forecasts that have been published since September 1st.

Where Are Home Values Headed Over the Next 12 Months? | MyKCM

“Between May & July 2020, national prices increased by over 2%, which represents the largest two-month price increase observed since the start of the index in 1991.”

Bottom Line

The numbers show that home values have weathered the storm of the pandemic. Let’s connect if you want to know what your home is currently worth and how that may enable you to make a move this year.


09.28.2020 Maryland Real Estate Trends Echos Much Of The Countries


August Housing Data Reveals a Robust Summer Market Amidst Declines in Inventory

  • Median Sale Price is up 9.7%
  • Average Sale Price up 11.2%
  • Months of Inventory down 60% to 1.4 months
  • Median days on market are down from 22 to 9
  • Seven of Maryland’s rural counties have seen over 20 percent increases in average prices over last year.
ANNAPOLIS, MD – September 28, 2020 Maryland’s August housing market demonstrated substantial recovery from spring’s COVID-related disruptions, according to housing statistics released by Maryland REALTORS®*. Data from June through August show both an increase in average and median home prices, and a decline in months of available inventory, echoing nationwide trends and sparking concern over housing imbalances.

“The average sales price increased year-over-year from $361,823 to $402,452 and the median price increased from $310,000 to $340,000, growth of 11.2 percent and 9.7 percent, respectively” said Maryland REALTORS® President John A. Harrison. “Months of inventory dropped 60 percent to just 1.4 months, compared to 3.5 last year, which is a historic low for the state. Moreover, the median days on market fell from 22 to 9 which aligns with stories we’ve heard of bidding wars and homes selling within hours of hitting the market.”

“The most notable, but unsurprising, feature of the current housing market is the sharp rise in activity in rural areas,” said Harrison. Seven of Maryland’s rural counties have seen over 20 percent increases in average prices over last year. With the rise in working from home, commute times are less of a factor. That and the relative affordability of rural areas make urban and some suburban communities less attractive. “The pandemic has prompted individuals and families to reimagine their housing requirements, often desiring home office space and more expansive outdoor living areas.”