While no one anticipates a return to the frenzied housing market of the pre-recession days or even the hectic pace in 2013 when low inventory and low mortgage rates pushed some buyers into bidding wars, the fall market in Maryland is on track to continue a strong trajectory for the year.
Pent-up demand this fall is likely to come from several sources, says Jonathan Hill, vice president of marketing and communications for Rockville-based multiple listing service MRIS.
“Uncertainty over rising interest rates is goading some people into taking action now to buy a home,” Hill says. “We also expect an increase in boomerang buyers — those who have cleaned up their credit after a foreclosure or bankruptcy seven or eight years ago. Millennials are coming into the market, too, particularly now that there are more low down payment loan programs.”
Hill says 12.8 percent more homes were sold in Montgomery and Prince George’s counties in 2015 between January and August than in that same period in 2014. In addition, the median sales price rose by 1.6 percent in Maryland year over year.
“Inventory is still way below the peak, with about 3.3 months of supply of homes, but the number of homes on the market in Maryland is almost 10 percent higher this August than last August,” Hill says.
While rising inventory sounds like it could ease competition for buyers this fall, many house hunters are still having trouble finding a house that meets their needs and fits their price range and their preferred location.
However, the “average days on the market” statistic, which provides an indication of how long it takes a house to sell, rose 10.4 percent to 53 days in Maryland so far this year, which means that some houses are taking longer to sell than in the past.
“I anticipate the fall market to be generally slower this year than last, and we’re already seeing it in the increasing number of days that it takes to sell a home,” says Nela Richardson, chief economist for Redfin in Washington.
In spite of the regionally slower pace of sales and potential stagnation in prices, Richardson says there are many areas and price ranges that will continue to experience high demand.
Richardson calls Prince George’s County “the last affordable area around the Beltway” and says prices continue to rise there because of increasing demand from buyers from other parts of Maryland and from buyers moving across the river from Alexandria into Upper Marlboro and Bowie.
Hill says the largest number of sales in Prince George’s County has been in the category of single-family houses with four or more bedrooms priced from $200,000 to $300,000.
“Prices in the county were up 5 percent in July over July 2014 and the average days on the market have dropped by 5 percent, too,” says Yolanda Muckle, a realty agent with Long and Foster Real Estate in Mitchellville. “We’ve been seeing multiple offers all year on nice single-family homes and town homes.”
Muckle says she anticipates that fall will be fast-paced, with more houses coming on the market and serious buyers looking at properties so they can move in before the end of the year.
One of the largest new home developments in Prince George’s County is Westphalia, where town houses priced from the low $300,000s to the low $400,000s are available from Ryan Homes, Haverford Homes and Mid-Atlantic Builders at Westphalia Town Center. At Parkside at Westphalia, Mid-Atlantic Builders, Ryland Homes and Dan Ryan Homes are building new single-family houses and town houses priced from the low $300,000s to the low $500,000s.
Dan Fulton, senior vice president of John Burns Real Estate Consulting in Reston, says that future plans for Westphalia call for as many 15,000 residences.
Fulton says development is also bringing buyers to Charles County, particularly in the planned community of St. Charles.
“St. Charles has a good community plan, great amenities and lots of different types of homes,” Fulton says. “The good schools and good quality of life are causing some migration from Prince George’s County into Charles County.”
Resale and newly built single-family houses priced under $300,000 have been selling quickly all summer, says Julie Cronan, a realty agent with Long and Foster Real Estate in Waldorf.
“Now that fall is here we’re expecting an uptick in sales of higher-priced homes to move-up buyers,” Cronan says. “The market for homes priced at $400,000 and up was strong at the beginning of the year but then it weakened in the spring and summer. The lower-priced market never slowed at all.”
Cronan says buyers can find some renovated foreclosures in Southern Maryland, including three- and four-bedroom single-family houses priced under $300,000. However, she says inventory is “tighter than I’ve ever seen it.”
Cronan says local and national builders are increasing the supply of houses in the area, particularly in Northern Charles County.
Bethesda, Potomac and Chevy Chase, Md., consistently rank among the costliest places in the region to buy a house, with the “lower range” of homes priced from $700,000 to $1 million and the mid-range from $1 million to $1.5 million, says Brad Rozansky, a real estate agent with Long and Foster Real Estate in Bethesda. Rozansky says there’s currently less than a two-month supply of houses on the market in the five Montgomery County Zip codes that are closest to D.C.
“Buyers this fall should expect to face multiple offers on homes that are a ‘10’, meaning they are in excellent condition and priced appropriately,” says Rozansky. “If the home is a ‘7’, buyers have more of a chance at negotiating.”
Rozansky says typically more houses go on the market in fall than in the summer, which should help buyers a little. He says houses priced above $1.5 million are lingering on the market longer right now, so if your budget stretches to the upper range you can find more options.
Hill says the largest number of sales in Montgomery County has been in the category of single-family houses with four or more bedrooms priced from $600,000 to $800,000.
Newly built houses from a variety of builders can be found for $1.5 million and above near Walt Whitman High School in Bethesda, Rozansky says. New townhouses from EYA are also selling now in Bethesda at Montgomery Row from the $700,000s and at Grosvenor Heights for $1.25 million.
Homeowners who are considering a sale may want to prepare for the 2016 market.
“The so-called ‘spring market’ has actually started in February for the past three years,” Rozansky says. “If you’re going to need a few months to get your home ready for sale you should start in the fall.”
While regional differences are abundant in Maryland, the demand for houses and the limited supply affect every community.
Michele Lerner is a freelance writer.