The Importance of Working with a Local Realtor in Montgomery County
One of the most affluent counties in the United States, Montgomery County enjoys some of the hottest housing markets in the country today. The towns and cities here are among the many communities that enjoyed tremendous real estate growth in the wake of the pandemic. Home values saw a marked increase while supply was at an all-time low, making for a seller’s market.
As of June, 2022, market conditions in the area have generally remained unchanged, with homes selling faster than at any other time in the past. But while Montgomery County is still a seller’s market, recent events that impacted real estate throughout the country now present new risks and opportunities for homebuyers.
Working with a Realtor always puts homebuyers in the best position to find the right home and close the best possible sale. But recent market dynamics have made the guidance of a professional more crucial than ever.
Thinking of buying a home in Montgomery County? Read on to learn why it’s important to work with a local Realtor who knows the market inside and out.
The real estate market in Montgomery County, MD
With its proximity to Washington, DC, job opportunities both in the public and private sectors, upscale neighborhoods, excellent schools, and wealth of attractions and amenities, Montgomery County has always been one of the most sought after places to live in the US.
Encompassing historical communities such as Gaithersburg, Rockville, Bethesda, and Potomac, Montgomery County is a center for culture, education, business, and government. It has one of the highest average household incomes in the country and is home to a highly educated population, boasting the highest percentage of residents with postgraduate degrees.
Historically, real estate values in Montgomery County communities have always been on the rise, and this trend was even more pronounced in the last two years.
Current real estate market trends in Montgomery County vs. the US
- Home prices
According to Realtor.com, the median home price in Montgomery County as of June, 2022 was $670,000, a gain of 10.7% from June, 2021 and an increase of 27.6% from July, 2019.
Furthermore, in May, 2022, the sale-to-list price ratio is 103.5%, which means that on average, homes sold for around 3.5% more than their listing prices. This indicates that many homebuyers in the county were willing to pay more than what sellers were asking.
Nationally, the median listing price of homes for June, 2022 was $450,000, up 16.9% from June, 2021 and 31.4% from June, 2020.
- Days on market
In June, 2022, homes in Montgomery County were sold at an average of 35 days, fewer than the 50 day average in June, 2020, and almost the same as 2021’s 37 days. By comparison, the average days on market for homes for sale throughout the US was 82 days in June, 2022.
Days on market is an indication of the level of demand for real estate in an area. Fewer days on market mean buyers are jumping on the opportunity to buy a home as soon as it is listed and close the sale as early as possible.
Inventory, or the number of available homes for sale, is at its lowest ever in Montgomery County, as it is in most of the country. Coupled with the high demand for homes, this shortage is pushing home prices up, creating a seller’s market.
In May, 2022, Long & Foster reports that active inventory in Montgomery County was 19% lower than the previous year. This is equivalent to 0.7 month of supply, which indicates that the available homes for sale will likely be sold in less than a month given the current demand.
Nationally, the inventory of actively listed homes increased by 18.7% in June 2022 from June, 2021. However, this is 34.1% lower than in 2020 and 53.2% lower than in 2019.
- Home sales
In Montgomery County, the number of homes sold in May was 1,325, a 6% increase over the previous month. However, this is down 10% compared to the number of homes sold in May, 2021.
Nationwide, the total number of homes sold in May, 2022 decreased by 3.4% compared to May, 2021 – a downward trend that has been observed in the past four months.
Market forecasts for the rest of 2022 and beyond
While the real estate market in Montgomery County and the rest of the country remains robust, there are significant signs that point to an impending slowdown.
From February to May, 2022, home sales in the country have been going down. By the end of May, total home sales registered an 8.6% decrease over the previous year.
Moreover, there has been a marked increase in price reductions throughout all regions in the United States, with around 7.6% more homes seeing reduced prices compared to 2021. In the Washington Metropolitan Area to which Montgomery County belongs, around 14.6% of homes for sale had price reductions, an increase of 6.4% over the previous year.
Rise in mortgage interest rates
Experts attribute the decline in housing demand to the rapid rise in mortgage rates, reaching levels not seen since 2018.
When the pandemic hit, the federal government worked to keep interest rates low to reduce economic damage. In January, 2021 the lowest ever interest rate in the country was recorded at 2.65%. This opened up plenty of opportunities for homebuyers, resulting in a home buying frenzy that swept most of the country, including Montgomery County.
In 2022, the climate changed drastically. Starting at an average of 3.55% for a 30-year Fixed Rate Mortgage , the interest rate steadily climbed, and by April 13, has surged to 5%. It went as high as 5.81% on June 22, 2022 but has gone down to 5.30% as of July 6, 2022.
Experts are predicting that the interest rate for a 30-year FRM will vary from 5% to 7% for the rest of the year, depending on conditions such as inflation and oil and gas supply.
What Montgomery County homebuyers can expect for 2022 and beyond
If you have been looking to buy a home in Montgomery County, you may find the combination of a hot seller’s market and rising interest rates difficult to navigate. Should you hold off your home buying plans? Can you hope for interest rates to climb down to pandemic levels? If so, how long should you wait?
These market forecasts can help you in making your decision:
- The market is not likely to crash
Some experts predict that the US economy is headed to a recession, which could hit in 2023. Many homebuyers are taking a wait-and-see attitude, regarding the situation as similar to the Great Recession of 2008 when home prices reached record highs, then plummeted dramatically. However, real estate insiders and economists say this dreaded “bubble burst” is not likely to happen.
Principally, experts say the conditions that led to the market crash in 2008, particularly lax underwriting and predatory lending, are not present today. Instead, today’s high home values are the result of normal market movement – the supply of homes simply cannot cope with the high demand.
- Rising mortgage rates are not likely to result in significantly lower home prices
The chief economist at Redfin sees a price reduction of zero to 4% under the present scenario.
Traditionally, high mortgage rates serve to discourage homebuyers, which in turn can lead to reduced home prices. However, because demand has been so high, the impact of higher mortgage rates on home values is likely to be less than expected, particularly with supply at an all-time low.
- Competition for homes will cool down
The combination of high home prices and high mortgage rates can make buying a home less affordable to a large number of people. While this doesn’t mean that you can expect home prices to fall back to pre-pandemic levels, it can also open opportunities that were hard to come by in the last two years. Experts say bidding wars are likely to cool off, giving you a better chance of landing your dream home without intense competition.
What a Montgomery County Realtor can do for you
Navigating these tricky market conditions can be difficult, but the challenges are compounded without a local real estate expert to guide you. In a fast-changing market, it is easy to miss out on opportunities and make emotional decisions that can prove costly down the road.
In buying your dream home, working with a Montgomery County real estate expert can benefit you in many ways:
- They can guide you to the right home faster.
With rising mortgage rates and high home prices, it’s important to set a budget and to stick to it as closely as possible. A Montgomery County Realtor can help you find the home that matches your budget and preferences faster than if you were to do it alone.
With their extensive local knowledge, a local agent won’t need to look into all available options to identify a home that’s a good fit for you. As someone who belongs to the community, they’re intimately familiar with neighborhoods, places of interest, transportation options, and other details that may factor into your home selection.
Moreover, their market expertise includes knowing the price points in various neighborhoods and areas in the community, allowing them to quickly find homes that match your budget.
- They can expand your pool of prospective homes.
They can expand your pool of prospective homes.
Local agents have access to homes for sale that are not publicly listed, or those shared with them by other Realtors in the area. They will also have information about foreclosure properties, which can present excellent opportunities for you to buy a home in the area at a lower price.
A local Realtor will also know about new builds and developments in the county. In a market where there’s high demand, low supply, and rising home prices, new construction properties, condos, and townhomes can be great options.
- A local Realtor can stay focused on achieving your home buying goals
Searching for the right home requires dedication and attention. In areas like Montgomery County where supply is low and buyers are ready to jump on an opportunity, it’s imperative to be updated about new listings and to act fast in initiating contact with the seller of a prospective home.
If you have a job or other activities to attend to, you will likely not be able to devote as much time as needed in watching the market, as well as in the back-and-forth communication with the seller. On the other hand, it’s part of the Realtor’s job to be constantly on the lookout for the right home for you, and to be on their toes once an opportunity arises.
- They’re available any time you need them.
As they live in the area, a local agent can schedule viewings at short notice, and can easily get in touch with the seller to negotiate or to ask your questions. They can be physically present during home inspections, walkthroughs, and the closing to ensure things go smoothly and any concerns are addressed onsite or as soon as they arise.
A Montgomery County Realtor is also knowledgeable about local laws and regulations related to home buying and selling, and will ensure compliance to avoid delays and other issues.
- They have an extensive local network.
An experienced local agent would have built a network that includes other professionals in the field, including mortgage brokers, lawyers, and home inspectors, who can provide you with the guidance and services you need in buying and moving to your new home.
Realtors have a reputation to uphold in the areas they serve so they often work only with the most reliable and reputable local professionals. This means you will not need to spend plenty of time vetting a service provider recommended by your agent.
- They provide invaluable guidance in negotiations
Navigating a complex market means being on the lookout for all kinds of opportunities, including during negotiations. A real estate professional has been trained on effective negotiation techniques that can help you land the best deal. They are aware of nuances that they can use to your advantage, such as weighing how motivated a seller is to sell their property.
Your Realtor can also come up with a winning strategy that can give you an edge over other buyers, such as increasing your earnest money deposit, waiving certain buying contingencies, or proposing contingencies that are favorable to the seller, all while making sure your interests are protected.
Most of all, a real estate agent has been trained to remain objective throughout the process. Home buyers and sellers often tend to get carried away by their emotions, which could lead to bad decisions and lost opportunities. An experienced Realtor will guide you through your options rationally and help you make data-driven decisions.
What to look for in a Montgomery County Realtor
Given the importance of working with a real estate professional in today’s volatile market, it is essential to choose the right Realtor to work with. In Montgomery County, there are dozens of real estate agents to choose from, but if you want guaranteed great results, choose a Realtor with these qualities:
Working with an experienced real estate professional is especially critical in this dynamic market. Someone who has been in the business for a long time will have gone through – and succeeded – in all kinds of markets over the years. They can read the “signs of the times” and know the best way to help you get the most out of the current situation.
A Realtor who gives top priority to communications is a Realtor you can trust. They will listen to your needs and objectives so they can map out a strategy to achieve what you want. They understand that home buying is an emotional journey, and will make sure they are around when you’re looking for information or updates, or simply want them to hold your hand.
- Local expertise
While the market in Montgomery County mirrors other markets, it is unique in many ways, and the best way to succeed here is to work with a local expert. A Realtor who specializes in the area can guide you to the right home more easily and provide you with the assistance you need in relocating here. They would have built a network of local professionals whose services are essential to buying a home in the area.
Work with Judy Martin in finding the perfect home in Montgomery County
With over 29 years of experience, Judy Martin is the perfect guide to navigating the complex real estate market in Montgomery County today. If you’re looking to buy your dream home in Bethesda, Gaitherberg, Rockville, Potomac, or any other community in Montgomery County, Judy can help you land the property that matches your needs and preferences.
Always putting her clients first, Judy is willing to go the extra mile to ensure your satisfaction and give you a seamless real estate experience. More than 50% of Judy’s clients are repeat business or referrals – a testament to the kind of personalized, dedicated service she provides.
Give Judy a call today at [ai_phone href=”+1.301.379.1700″]301.379.1700[/ai_phone] or send her an email [mail_to email=”[email protected]”]at this address.[/mail_to]