Lack of housing inventory continues to be a problem throughout the Washington region, but Prince George’s and Montgomery counties in Maryland have far surpassed other jurisdictions in the area when it comes to price appreciation.
“Both D.C. and Northern Virginia housing markets have achieved record highs already, so they don’t have as much room to grow in terms of prices,” said Jonathan Hill, spokesman for multiple-listing service Bright MLS (formerly MRIS) in Rockville. “In Maryland, there’s still room for price appreciation.”
Prices rose fastest in Prince George’s County, climbing 19 percent from February 2016 to February 2017, said Hill. The median price for both counties combined rose 9.6 percent in that same period to $312,345, and the number of homes sold rose by 7 percent.
“Both Montgomery County and Prince George’s County have parallel activity, with both moving up in the pace of sales and prices since the trough of 2011 and 2012,” said Hill.
The total volume of sales in Montgomery and Prince George’s counties rose 16 percent from January and February 2016 to January and February 2017, according to Bright MLS. The faster-paced market is reflected in the 13 percent decrease in the average number of days properties stay on the market, which dropped to 58 days in January and February 2017.
The majority of active listings for townhouses and condos in Maryland are in the $200,000 to $400,000 price range, according to Bright MLS. For single-family houses, half of all listings fall into one of three price ranges: $200,000 to $300,000, $300,000 to $400,000 and $1 million to $2.5 million.
But high demand is resulting in a dearth of listings in the middle of the market, experts say.
“Single-family homes priced under $500,000 are just flying off the shelves,” said Nela Richardson, chief economist of Redfin brokerage in Washington. “Similarly, townhouses priced under $300,000 are also selling quickly. We’re seeing bidding wars in some areas, such as Upper Marlboro, where entry-level houses are selling fast.”
Richardson said sellers in Prince George’s County are getting more aggressive with their pricing since they see their neighbors getting full-price offers and even competing offers. She anticipates competition for homes becoming more heated over the summer.
However, uncertainty over possible budget cuts and a reduction in the size of the federal government could have an impact on the local economy and housing market. The Trump administration’s goal to make deep cuts in the federal budget could have an outsize impact on the local job market and, therefore, the housing market.
Elliot Eisenberg, chief economist for GraphsandLaughs, an economic consulting firm and former senior economist with the National Association of Home Builders in Washington, said that price appreciation in the region could be hurt and prices could even decline by 3 or 4 percent if the size of the government is reduced. However, he includes two caveats with this prediction.
“First, the likelihood of these proposed budget cuts occurring is quite low, and second, the budget cuts, even if they come to pass, will not permanently reduce the number of employees working for the government,” said Eisenberg. “In the future, government can be expected to again start growing.”
Richardson said it looks like the possible FBI relocation to Prince George’s Countyhas been tabled indefinitely, which could have an impact on that county’s housing market.
“For a while now the county has hoped for an infusion of jobs and investment to the area that would go along with the relocation, but that’s not going to happen soon, it appears,” she said.
Before the presidential election, in response to growing demand and a lack of resale listings, builders ramped up development in Montgomery County and, to an even greater extent, in Prince George’s County.
“There are a couple of trends we’re seeing in new developments, including high-density development in ‘lifestyle cities’ with a mix of housing, restaurants and other amenities,” said Dan Fulton, senior vice president of John Burns Real Estate Consulting in Reston. “The other unusual thing we’re seeing is a high number of condo and townhouse developments with roof terraces.”
In Montgomery, new developments include upscale condos priced at more than $1 million in Bethesda. Townhouses at Westside at Shady Grove Metro from EYA are priced in the $600,000s and EYA’s townhouses at Montgomery Row are priced from about $800,000 to $1.2 million. The builder’s townhouses at Grosvenor Heights and Chevy Chase Lake are priced from $1.2 million and $1.5 million, respectively.
More affordable houses are available from Winchester Homes at the Glenmont Metro station, which has townhouses from the mid-$400,000s, and at Poplar Run, where single-family houses are priced from the $500,000s. The Clarksburg development in upper Montgomery County includes townhouses priced from the $400,000s and single-family houses priced from the $500,000s and up from several builders.
In Prince George’s County, new development is primarily clustered near Hyattsville, Upper Marlboro and Clinton, where Fulton said more land is available for larger developments.
“Buyers are coming to Prince George’s County in larger numbers from the city, other counties and within the county because of lower prices,” said Fulton. “Buyers are realizing they can stay close to their employment and pay much less than they do in Fairfax County or Montgomery County.”
Near Hyattsville, Stanley Martin Companies is building Riverdale Park Station, which has townhouses priced from the $400,000s within walking distance of the University of Maryland, and Metro Pointe, which has two-level condos and townhouses within walking distance of the Landover Metro station, shops and restaurants, with prices starting in the $200,000s.
In Upper Marlboro, the Westphalia Town Center and Parkside at Westphalia developments both offer a variety of houses, from condos to townhouses and single-family houses in a range of prices from the $200,000s to the $400,000s and up. The Town Center development includes restaurants, shops and bars, and Parkside includes walking trails, multiple swimming pools, tennis courts and a clubhouse.
“We’re seeing what we call ‘surban’ development really take off in places like Westphalia Town Center, where people want urban amenities along with the suburban lifestyle,” said Fulton.
At the same time, builders like Caruso Homes are constructing more traditional suburban communities with single-family houses on half- to 2.5-acre sites near Bowie, Upper Marlboro, Brandywine and Fort Washington.