Low inventory and high home prices continue to plague the Washington region this fall.
While conditions in Montgomery and Prince George’s counties are different, both have seen a tightening of the market with most homes selling within one to 10 days, says Jonathan Hill, vice president of marketing and communications for multiple-listing service Bright MLS (formerly MRIS) in Rockville.
“The housing market in Montgomery County was slower than Prince George’s County, with sales more sluggish there in 2016 and earlier this year,” said Nela Richardson, chief economist of Redfin brokerage in Washington. “But now the two counties are balancing out a little in activity. Bethesda, Rockville and Silver Spring are all getting more active with buyers in Montgomery County, while in Prince George’s County there’s a lot of construction that sellers have to compete with. Builders are offering more concessions, which means the number of buyers in Prince George’s may be easing up a bit.”
Sales have been flat in Montgomery for the first eight months of 2017, said Hill, virtually the same as in 2016.
“The median sales price in Montgomery County rose by 3.7 percent to $425,000 year-to-date at the end of August,” Hill said.
The most listings for single-family houses in the county in August were in the $600,000 to $800,000 range, while the most townhouse listings were in the $300,000 to $400,000 range. The majority of condo listings in Montgomery were priced between $200,000 and $300,000.
In Prince George’s, the median sales price rose by 10 percent to $275,000, far below the median sales price in surrounding counties and the District.
“Prince George’s is by far the most affordable county for homes, especially for areas in close proximity to the city,” Hill said. “The county also has the most new construction in the region and the most affordable newly built houses.”
The pace of sales is higher in Prince George’s than in Montgomery, with an increase of 6.8 percent when comparing the first eight months of 2017 with the first eight months of 2016.
The price range in Prince George’s with the most listings of single-family houses is between $300,000 and $400,000. The price range with the most townhouse listings is between $200,000 and $300,000.
Condo listings in the county are split pretty evenly between $100,000 to $200,000, $200,000 to $300,000 and $300,000 to $400,000.
Buyers are used to this market’s low inventory and expect to compete for houses in the most desirable areas, said Hill.
“Right now, houses in Silver Spring and in Rockville near the Town Center and Metro, where people can walk to activities and transportation are really hot,” said Richardson. “There are escalation clauses, but they tend to be in increments of $1,000 or so and sell $5,000 to $10,000 over the asking price rather than $100,000 over list price, which happens sometimes in the District.”
In Prince George’s, competition is less heated because of the availability of new construction, particularly townhouses.
In Montgomery, new construction tends to be in the form of luxury-level single-family houses and condos, said Donna Evers, broker and owner of Evers & Co. Real Estate in Washington.
“The cost of land and the cost of labor in this area is so high that new construction mostly just adds to the expensive housing on the market and doesn’t address affordability issues,” said Evers, whose firm was recently sold to Long and Foster. “However, the farther away you get from the city, the more you can find some affordable properties.”
Evers said new communities like Pike & Rose in North Bethesda are attracting empty-nesters who want to live in a walkable community and in new construction with less maintenance.
Among the new developments in Pike & Rose is the Rose condo under construction above the Hilton Canopy hotel.
“The condos are selling very well because now that the retail elements of Pike & Rose are coming to fruition there’s a good sense of place there,” said Chris Masters, executive vice president of McWilliams Ballard in Washington. “Buyers are also excited about the hotel amenities that will be available to residents.”
Other new developments in Montgomery include Westside at Shady Grove by EYA and the Brownstones at Chevy Chase Lake by EYA, both designed to be walkable to transit options, restaurants and shops.
“In Montgomery County, the new construction is mostly upscale townhouses, including some with elevators to appeal to empty-nesters,” said Dan Fulton, senior vice president of John Burns Real Estate Consulting in Reston. “EYA designed some slightly more affordable townhouses at Westside at Shady Grove that are 16 feet wide at the front door level and 20 feet wide on the bedroom level so you can have three bedrooms all on one level. They’re priced in the $500,000s, compared to $1.5 million for the townhouses at Chevy Chase Lake.”
In Prince George’s, a new 248-unit condo building, the Haven, is under construction at National Harbor. Masters said it’s the first new condo building at National Harbor in a decade. Sales are anticipated to begin this fall.
Several builders are active at Westphalia Town Center, close to the Beltway and the District, including Mid-Atlantic Homes, which is building urban-style townhouses priced from the low $400,000s, said Fulton. The townhouses have rooftop terraces over the garage level so buyers can have first-floor outdoor space. Several builders are constructing townhouses and single-family houses at Westphalia Town Center and nearby at Parkside at Westphalia, a more traditional planned community.
“The townhouses by Stanley Martin at Riverdale Station are in an area that hasn’t been very active with new construction until now,” said Fulton. “That’s a more affordable community and yet within walking distance to a Metro station. Some other builders are also developing townhouses and condos near Hyattsville that are reasonably priced in the $300,000s and $400,000s.”
Stanley Martin is also building condos and townhouses at Metro Pointe within walking distance of Landover Station with prices starting in the upper $200,000s.
New construction adds some supply to the Maryland suburbs but still not enough to offset the long stretch of limited resale listings. Buyers will still need to be ready to compete for homes this fall.