According to statistics from our local MLS, the median price of a detached home in Bethesda (zip codes 20814, 20816, and 20817) improved slightly this year, an increase of just over 1% when compared to the same six-month period last year. Last year from January to June, the median price was $1,012,000 for a detached home in Bethesda. This year, the median price of a detached home in Bethesda through June 30th is $1,025,000, or an increase of $13,000.
The inventory of available homes is extremely low right now even though there have only been 417 detached homes sold so far this year. Last year at this time 450 detached homes had been sold. This represents a 7.3% decline in the number of transactions. This is the first decline in sales volume during the first six months of the year since 2014.
On average, it’s taking about a week longer to sell a detached home in Bethesda this year versus the same period last year. The average number of days on the market currently stands at 50 days for single-family homes, with the median at just under three weeks. The Greater Capital Area Association of Realtors reported that Montgomery County’s median home price in May was the second-highest level in 10 years (last May being the highest).
The real estate market across the country continues to remain strong. The National Association of Realtors reported that the median existing home price for all housing types in May was $277,700, up 4.8% from May 2018 ($265,100). The price increase in May marks the 87th straight month of year-over-year gains.
Mortgage Interest Rates Fall
Freddie Mac recently released the results of its periodic research on mortgage rates. Their data indicates that after consistent declines this spring, mortgage interest rates have now stabilized. The average interest rate on a conforming 30-year fixed-rate mortgage loan, extended to borrowers with excellent credit, has fallen to 3.8%. Last year at this time the interest rate was 4.57%. It is unusual to see rates decline during the spring market.
Sam Khater, Freddie Mac’s chief economist, says, “While the continued drop in mortgage rates has paused, home-buyer demand has not. This is evident in increased purchase activity and loan amounts, indicating that homebuyers still have the willingness and capacity to purchase homes. Today’s low rates, strong job market, solid wage growth, and consumer confidence are typically important drivers of home sales.”
Lawrence Yun, NAR’s chief economist, agrees. He said recent data shows that consumers are eager to take advantage of the favorable conditions. “The purchasing power to buy a home has been bolstered by falling mortgage rates, and buyers are responding.”
Interest rates today are hovering near 4%, making now a great time to trade-up on a new home or refinance. The difficult part of the home-buying equation right now is the lack of available inventory. Currently, there is only a two-month supply of available detached homes for sale in our Bethesda area. A balanced market occurs when there is a five to six-month supply of homes.
Our market is “top-heavy” right now. The luxury market in our area (homes priced above $1,500,000 or so) has far more inventory of available homes than homes priced below that level. In June, there were 19 homes sold in Bethesda above $1,500,000. There are currently 93 homes for sale priced above $1.5 million. At that tier of pricing, there is just over a 5-month supply of inventory.
The opposite is true for homes priced below $1,000,000. Last month, 44 homes were sold in Bethesda priced under $1 million and there are currently just 44 homes actively priced below $1 million. That’s only a one-month supply of homes. Finding an “affordable” home in this climate is tough.
If you’re looking to buy a home in the area, there are a number of sales occurring without the home ever being listed for sale on the open market. The MLS is not the only source of homes for sale. An experienced, well-connected agent has access to not only the MLS but also “coming soon” and private network offerings as well. Call us, we can help you find the home you’ve always dreamed of.
BY BRIAN MAURY | 07.15.2019