real estate

Chatting

the georgetowner

August 2008

Dan Melman and Mary Jane Molik have a unique take on the real estate market to be this coming fall. Just when we thought it would be a boom time for local realtors, Dan and Mary Jane warn that political change this fall will not have the same local home yield as previous elections. “Politicians and lobbyists do not want to be seen buying big houses when constituents are losing their homes,” say the two W.C. & A.N. Miller realtors. “Our real estate market has taken a beating with talk of recession, government involvement in Wall Street rescue, Main Street bankruptcy reform and the pending bail outs of Fannie Mae, Freddie Mac and Indy Mack,” Dan and Mary Jane continue. But they both agree that our local market is much more robust than the national market. “Upper Bracket purchasers might not feel the tightened credit environment, but their companies and portfolios certainly are affected. Whether through smart investments or strong foreign currency, well-positioned purchasers have leverage, are shopping for bargains, and this is their market.”

And what exactly is going on in our local market? Here are some interesting statistics that sheds some light on the subject:

* Homes priced $1 million and above represent the top 5-9 percent of sales in each locality. The top 1 percent threshold is $2.7M in the District; $2.1M in Montgomery County and $1.7M in Northern Virginia.

* The District is faring best among the local jurisdictions, where over 24 percent of these higher priced homes still sell for full price or more. Bidding up from list price is more uncommon; in DC only 7 out of the 239 sales closed for more than 5 percent over final list price, indicating that competition between buyers for a home is increasingly unusual. The District supply is a balanced 6 months.

* On average, higher priced homes in the District that actually sold received a contract in 60 days. Similar homes that sold in Montgomery County and Northern Virginia took 68 days and 92 days. The affect of overpriced homes that fail to sell is not factored in these numbers. Proper pricing is still critical.

* Condos and coops accounted for 12 percent of recent million plus sales in the District.

* Bank-owned properties and short-sales are increasingly common in lower price points, but appear in the upper brackets as well. Recently, the Georgetown and Spring Valley neighborhoods have had foreclosure sales.

* This glut of properties available is likely understated as many homes are being quietly offered “off the market” and additional luxury condos and coops are available as part of new construction projects that are not integrated into the multiple list.

* Political heavy hitters often shop for homes priced above $1 million.