The market is the craziest it’s been in 15 years, with buyers competing against dozens of other offers and waiving every contingency. Here’s how it happened and what it could mean for an already unequal region.
In the 20814 ZIP code, which includes parts of Bethesda, North Bethesda, Chevy Chase and Kensington, the average sales price was about $1.25 million, a roughly 8.6% hike over 2019.
The Bethesda real estate market, which usually heats up in the spring and then cools down heading into winter, was different in 2020, with high activity continuing through the end of the year, according to Bright MLS. While closed sales in Montgomery county were up 6.1% over the same period in 2019, they increased by 26.4% in December vs. the same month in 2019.
Most buyers don’t seem to be driven by a fear of living in more densely populated areas during a pandemic. Rather, their experiences during the pandemic made them realize that they wanted more room—indoors and out.
It’s not just single-family homes that are hot.
According to Bright MLS, buyers in the Washington, D.C., metro area continued to show strong demand for condos and townhomes, with median prices in November hitting a record $342,000. In Montgomery County, the median sales price for attached homes hit a 10-year high at $352,000 in November, a 6.7% increase over the median price in November 2019. The average sales price for attached homes in 2020 was more than $11,000 higher, at nearly $371,000, than the figure for the same period in 2019.
Though financing is favorable for buyers, those who are looking are finding that there aren’t many houses available—a longstanding problem in the county, according to agents and county officials. Although new listings were up just over 49% during December when compared with December 2019, they were down almost 6% over all of 2019.
As of October, the median sales price for single-family homes with a pool in Potomac increased 11% to $1.49 million from 2019 to 2020; in Bethesda, the increase was nearly 19%, to $1.75 million, according to Bright MLS data
The Potomac MD housing market got so hot through the summer and into the winter, especially for houses priced at $1.2 million and under, that buyers were offering hundreds of thousands of dollars above asking price.
In 2020, 642 houses were sold in the Potomac area’s 20854 ZIP code—96 more than in 2019, according to Bright MLS. The average sales price increased from just under $1.1 million to about $1.2 million.
The trend reversed a yearslong slump in which homes priced at $2 million and above languished on the market for months, if not years, requiring sellers to drop their prices or take them off the market.
Why move to the suburbs?
A survey released by moving company United Van Lines found that 13.5% of customers who moved in August cited the virus as a contributing factor in their decision. The data, released in October, was collected by parent company UniGroup from more than 6,000 United Van Lines and Mayflower customers who moved between March 1 and Aug. 31, 2020.
Career change was the major reason people moved in 2019, with about 50% relocating for a new job or company transfer, according to the United Van Lines 43rd Annual National Movers Study released in January 2020. In 2019, Washington, D.C., “saw the largest influx of residents due to a new job/company transfer at 78%,” the moving company reported.
According to the survey released in October, the District ranked No. 1 on a list of the “top outbound states” in the percentage of moves away from a location in which the virus was cited by customers as a contributing factor. At 37.5%, the city outranked New York state at 16% and Nevada at 15.7%.
So whats next for Bethesda Housing Market?
This spring, the planning board is expected to submit to the county council a draft of Thrive Montgomery 2050, the first comprehensive update of the 1964 general plan. It “envisions a county that is more urban, more diverse, and more connected,” according to planning department documents. The plan, which has been in the works for two years, is expected to move the county away from the car-centric community planning of the past. Its nine themes include providing “attainable housing for all” and rethinking “single-family neighborhoods near transit.”
The submission of development applications for Bethesda MD remains steady, noting that such plans are often years in the making, and developers most likely are anticipating that things will be different when they’re ready to move forward. The situation is similar to the aftermath of the 2008 recession, when approved projects “kind of sat on the shelf” while the economy recovered. Then you saw a lot of new things happening seemingly overnight, especially in places like Bethesda, where construction cranes currently dot the skyline.