Montgomery County, Maryland
Montgomery County was one of the few places in the region where housing prices last year kept up with inflation.
The median sales price for single-family houses and townhouses rose 4.2 percent, or $20,000, to $495,000, according to a Washington Post analysis of state records. Condominiums were not included in the analysis. In the Washington area, only the District had a sharper gain.
In 2007, inflation was 4.1 percent.
Montgomery County's gain was less than half the 9 percent increase of the previous year. That, in turn, was less than half the increase in 2005.
The drop in sales volume accelerated in 2007, with 28 percent fewer sales than in 2006; that year had a 17 percent drop in sales from 2005.
Julie Robinson, a real estate agent in Coldwell Banker's Kentlands office, said there are far fewer first-time home buyers in the market because the terms of lending have changed.
Robinson said that in 2006, most of the buyers she represented put no money down. Now that option is rarely available.
Would-be first-time buyers "don't have enough money to put down at least 5 percent," she said.
She said three shoppers came in this month who were strongly motivated to buy.
How much had they saved?
"Nothing," she said. "Most people live paycheck to paycheck, is what I'm finding."
There is no unifying narrative to the price shifts in the county, such as closer-in neighborhoods gaining more or higher-priced houses being insulated from the market downturn.
Ken Grant, an agent with Long & Foster for 15 years, said the irregular patterns remind him of the downturn in the early 1990s. "It's because of how unstable things are," he said. "Certain pockets are doing better than others. It's very hard to pinpoint the reason why."
Take this jumble around Gaithersburg:
The 20876 Zip code had the strongest appreciation of that area, with the median sales price rising 19 percent, to $391,250. To the west, in Zip code 20878, prices were flat although higher, with the median at $554,900. But immediately to the north, in Montgomery Village, Zip code 20886 recorded the biggest drop in volume in the county -- 46 percent fewer sales -- and a 4 percent drop in median price, to $316,850.
Grant said Montgomery Village has a large number of townhouses, many of them sold in the past three years when buyers were putting no money down and, as he put it, "when everyone was making ridiculous bids."
Now the market has turned, and many owners cannot set a reasonable price, he said, because they owe more than today's buyers are ready to pay. "They can't afford to get out," he said.
In Zip code 20876, there are more single-family houses, and more people made down payments, he said.
Over in Rockville, Zip code 20852 rose 11 percent, to a median price of $609,250, while Zip code 20850, immediately to the north, dropped 3 percent, to $580,000.
Grant's theory is that this is all marketing. "It's all psychological. It really is, a lot of it," he said. Agents call Zip code 20852 "North Bethesda," for example.
But that theory is less convincing when you look at 2006, when the same two Zip codes also diverged, one with a $20,000 drop, the other with a $55,000 gain -- but that year, it was 20852 that sank and 20850 that rose.
-- Mara Lee, Special to The Washington Post
The median sales price for single-family houses and townhouses rose 4.2 percent, or $20,000, to $495,000, according to a Washington Post analysis of state records. Condominiums were not included in the analysis. In the Washington area, only the District had a sharper gain.
In 2007, inflation was 4.1 percent.
Montgomery County's gain was less than half the 9 percent increase of the previous year. That, in turn, was less than half the increase in 2005.
The drop in sales volume accelerated in 2007, with 28 percent fewer sales than in 2006; that year had a 17 percent drop in sales from 2005.
Julie Robinson, a real estate agent in Coldwell Banker's Kentlands office, said there are far fewer first-time home buyers in the market because the terms of lending have changed.
Robinson said that in 2006, most of the buyers she represented put no money down. Now that option is rarely available.
Would-be first-time buyers "don't have enough money to put down at least 5 percent," she said.
She said three shoppers came in this month who were strongly motivated to buy.
How much had they saved?
"Nothing," she said. "Most people live paycheck to paycheck, is what I'm finding."
There is no unifying narrative to the price shifts in the county, such as closer-in neighborhoods gaining more or higher-priced houses being insulated from the market downturn.
Ken Grant, an agent with Long & Foster for 15 years, said the irregular patterns remind him of the downturn in the early 1990s. "It's because of how unstable things are," he said. "Certain pockets are doing better than others. It's very hard to pinpoint the reason why."
Take this jumble around Gaithersburg:
The 20876 Zip code had the strongest appreciation of that area, with the median sales price rising 19 percent, to $391,250. To the west, in Zip code 20878, prices were flat although higher, with the median at $554,900. But immediately to the north, in Montgomery Village, Zip code 20886 recorded the biggest drop in volume in the county -- 46 percent fewer sales -- and a 4 percent drop in median price, to $316,850.
Grant said Montgomery Village has a large number of townhouses, many of them sold in the past three years when buyers were putting no money down and, as he put it, "when everyone was making ridiculous bids."
Now the market has turned, and many owners cannot set a reasonable price, he said, because they owe more than today's buyers are ready to pay. "They can't afford to get out," he said.
In Zip code 20876, there are more single-family houses, and more people made down payments, he said.
Over in Rockville, Zip code 20852 rose 11 percent, to a median price of $609,250, while Zip code 20850, immediately to the north, dropped 3 percent, to $580,000.
Grant's theory is that this is all marketing. "It's all psychological. It really is, a lot of it," he said. Agents call Zip code 20852 "North Bethesda," for example.
But that theory is less convincing when you look at 2006, when the same two Zip codes also diverged, one with a $20,000 drop, the other with a $55,000 gain -- but that year, it was 20852 that sank and 20850 that rose.
-- Mara Lee, Special to The Washington Post
SOURCE: Full-value transactions as reported by the state
MAP: Dan Keating and Nathaniel Vaughn Kelso - The Washington Post
© 2008 The Washington Post Company
