Category: Market Statistics and Updates

Baby Boomer Bust?

Marcie Sandalow Market Statistics and Updates , , , ,

One item that has been on our mind as of late is whether or not the looming exodus from the housing market (as baby boomers age) will create an over-supply of inventory that lowers home prices and stalls sales. Fannie Mae warns that demand from younger generations is insufficient to fill the void left by older departing owners. The result may be gluts in some marketplaces. A Fuller Institute study, which focuses on the DC region, concurs.

Demographic data makes the case. Baby boomers, born between 1946-1964 own 32-million homes, or 2 of every 5 in the country. These homeowners face some key choices: sell, stay put and age-in-place, downsize or rent.

Fannie Mae estimates that between 2016-2026 between 10.5 million and 11.9 million older homeowners will end their ownership status. Between 2026 and 2036 that group will add another 13.1 to 14.6 million. The implications of this massive unloading remain to be seen.

Not surprisingly, there are some detractors. Lawrence Yun, the chief economist for the NAR (National Association of Realtors) sees some positive developments underway which might offset the “sell-off”: strong population growth within the US and the rise of over-seas buyers.

But don’t panic, the sell-off hasn’t happened yet. A recent study from Harvard’s Joint Center for Housing Studies says that we’ve got at least 10 years before the glut kicks in. Many boomers are expecting to age-in-place which may well result in a robust remodeling boom.

Millennials (those born between 1985-2004) have recently surpassed Boomers as the largest generation (both around 74 million), though they’ve been slow to jump on the home buying bandwagon, largely due to affordability. They tend to prefer smaller homes closer to city centers. The areas most likely to be affected by the sell-off are the exurbs and rural areas, where demand will be slight.

Where is all of this going? Who the hell knows. But it’s good to be aware of the issue and consider strategies for your future self.

Articles of interest:

Washington Post

Realtor Magazine  

And another Realtor Magazine article

CityLab

 

Bethesda Chevy Chase Real Estate Stats

Marcie Sandalow Market Statistics and Updates , , ,

As of this posting (January 13, 2015) there are 196 active listings within the Bethesda Chevy Chase marketplace (zip codes 20812, 20814, 20815, 20816, 20817 & 20818).  The median asking price for a single family or townhome is $1,595,000.  The median days on market is 109. When you average the numbers they both go up.  The average asking price for a Bethesda Chevy Chase listing is $1,749,006 and the average days on market is 134.

The least expensive house to be had currently in BCC is located at 8318 Brook Lane, listed at $550,000.

The most expensive listings share an asking price of $7,200,000 and are located at 7700 Oldchester Road and 6801 Hillmead.

Of course, we would be happy to show you any of these properties!

 

 

DC Area 35% Cheaper to Own than Rent

Marcie Sandalow Market Statistics and Updates , ,

I’m not going to reinvent the wheel, here.  Trulia just came out with a report that promotes ownership over renting for those planning on staying in the same place for 5+ years within the DC area. In Montgomery County that figure is 36%, while in DC proper it’s 27% cheaper to own than rent.

Click here to see the full article.

Oh, and if you’re looking to save some big bucks and buy a place, give us a ring. There are a lot of programs out there to provide first time buyers with down-payment assistance. Don’t go it alone We are here to help!

How ’bout those Rising Interest Rates…

Marcie Sandalow Market Statistics and Updates , , , ,
doom and gloom

doom and gloomThe talk of the town these days is rising interest rates, and what it all means for home buyers and sellers.  In the last month or so interest rates on a 30-year fixed mortgage rose 3/4 – 1% within a 9 day period.  That’s a pretty astonishing hike, not to mention fast.

In the simplest terms, for those purchasing a $500,000 home with a 20% down payment, you will now pay @$4,000 more per year on your mortgage than you would had you settled on your home in May.  That’s $333 extra a month.

While a lot of folks are screaming doom and gloom, I’m not so sure it’s a bad thing.  Historically, rates haven’t dipped below 5% in the last 40 years until about 2008- the start of our latest recession.  The housing crisis along with low rates created opportunities for many buyers previously shut out of the market.  With the housing market (especially in our local market) decidedly in recovery mode, the feds are raising rates.  They can’t prop up the housing industry forever.

Freddie Mac Chart

Anyone familiar with the close-in DC marketplace knows that we’ve seen the return of “irrational exuberance”.  Those wishing to purchase property in the “under-$1-million” range are seeing an abundance of competition and multiple bids.  If the rising interest rates tamp down the degree to which homes are being overbid, then this is a good thing for buyers.

It may not happen all at once.  We continue to suffer from a lack of inventory, with absorption rates under a 2-months supply (a 5-6 month supply is considered healthy and balanced). But over time I would expect things to even out a bit more, making it a friendlier place for buyers.

Sellers, have fun while it lasts! Buyers, too!

Owning in DC 43% Cheaper than Renting

Marcie Sandalow Market Statistics and Updates ,

Trulia just published a report citing that buying a home is cheaper than renting in the DC real estate market.  The average monthly cost of rent is $2,098.  The average monthly cost of home ownership is $1,205, or a difference of $893 (-43%).  These figures are based on average prices during the summer of 2012.

Now, there are a few caveats to consider.  First off, these figures are based on owning the home for more than 7 years.  It assumes that you qualify for a low mortgage interest rate, and it also assumes that you itemize your taxes.  Under this scenario, home ownership is cheaper than renting.  Interestingly, it turns out that buying a house is cheaper than renting in all of the one-hundred largest metropolitan areas in the United States.  Seems to me that some DC types have already figured this out, given the very low inventory of homes for sale in the area.

All said, this isn’t a slam dunk.  Borrowers need to have 20% down payment to qualify for these loans.  That can take years.  Furthermore, a lot of people have suffered from job losses, or home losses.  Repairing credit, or just catching up on savings doesn’t happen overnight.  There is still a huge swath of people who can’t qualify for a mortgage and will find home ownership out of reach for many more years.

If you’re thinking that it might be time to take that leap, please fill out the form below.  We also take phone calls! Marcie 301-758-4894 or Cati 202-487-7177.  We look forward to hearing from you.

“How Is The Market?”

Catarina Bannier Market Statistics and Updates , ,
market stand--sketch--catarina bannier

market stand--sketch--catarina bannierOne of the big real estate trainers of America has suggested for years that there is only one possible answer to this question, ever: “It depends on where you live.”

Of course, he is right. And for the market we live in, this is one very lucky truth right now. While in some parts of the country property values have dropped more than fifty percent, prices in the DC metro area generally have not, at least not in the very close-in neighborhoods.

But it’s more complicated than that: overall market activity and inventory remain low. Many sellers seem to hold back for more lucrative times, while many buyers have a hard time finding a house.

Want to chat with the experts? Tune in tomorrow at noon to the Washington Post online for a live talk with expert demographer Lisa Sturtevant, who will chat with readers about “why the inventory is so low, what impact it might have on the region and where pockets of affordable inventory remain.”

Sounds interesting, doesn’t it?  I’ll definitely stop by–perhaps I’ll learn something new as well!

 

 

Did You Know That…

Marcie Sandalow Market Statistics and Updates , , ,

1) Housing affordability conditions are the best since NAR (National Association of Realtors) started recording such things in 1970. (The index is based on median home price, median family income and average mortgage interest rates).

*From the National Assoc of Realtors.

2) Inventory in the Washington Metro area is the lowest since the last quarter of 2005- the peak of the market.  (Housing inventory is considered balanced when it is a 6-month supply. We now have a 3.2 month supply.  This is sure to drive prices up, especially in the hottest areas with the most demand.)

*statistics provided by MRIS.