The area real estate market has been fairly strong for 2016, so far. In Montgomery County, for example, the number of properties coming on the market in the months of January through April is up for 2016, compared to 2015 and 2014. The increases in activity across the last several years is a further indicator that the market is continuing its long, albeit sometimes uneven, recovery from the depths of the devastating recession which began in 2007/2008.
(In the chart, you can see the clear seasonality of home sales. For more on that, see a previous blog post: https://www.larrygiammo.com/2015/01/03/seasonality-of-home-sales/.)
The volume of listings and sales is one part of the story. Another is how long it takes for properties to become “under contract” (that’s the time between when a house is for listed for sale and when a contract between the seller and buyer has been signed).
The majority of houses coming on the market in our area are selling fairly quickly. For example, among houses which sold in April in Montgomery County, 39.0% were under contract in one week or less, and another 14.7% were under contract within the second week. So, overall, 53.7% were under contract in two weeks or less.
(In the chart, you can see that over one-quarter of houses linger on the market for more than seven weeks. Some of these sit for months. The biggest, and most obvious, reason for this is the price is too high. The more a house is over-priced, the longer it will sit unsold. For more on that, see a previous blog post: https://www.larrygiammo.com/2015/01/08/why-setting-the-right-price-matters/.)
In some neighborhoods, we’re beginning to see offers over asking price, multiple offers, escalation clauses, and houses under contract in just a day or two. It’s not widespread, but if you’re a prospective buyer interested in a house that’s just come on the market, be sure to know how quickly similar nearby houses have been going under contract and at what prices, so you don’t risk missing out on the opportunity to submit an offer – you may need to move quickly.
Overall, I’d say the area real estate market is in a healthy place – not too hot, to the point where it’s becoming irrational, and not too slow, where it’s difficult for both buyers and sellers to simply buy/sell a home. Of course, like politics, real estate is local. What’s happening in a particular area or neighborhood may be meaningfully different than the averages from across the region. So, it’s very important to understand well whatever micro-market you want to buy or sell in.