The real estate market in Montgomery County continues to be dominated in many places by short sales and foreclosures.  Downcounty (Bethesda, Potomac, parts of Kensington, Chevy Chase) has fared better than upcounty areas.

These properties are pushing prices lower in the hard hit areas.  As of March 21, there are over 850 properties that are bank owned (REO).  I would characterize the present market as a price war and a beauty contest.  My homebuyers are uncertain about the future direction of home prices and the overall economy, so they are very cautious right now.

On the bright side, mortgage rates are under 5% and first time homebuyer tax credits make purchasing a home now very economical.  Aggressively priced homes are selling and buyers are able to find good deals with closing costs paid by the sellers.

The numbers tell the story - there were 5,166 active listings in Montgomery County in February, and 448 homes sold.  During this same time period in 2008, there were 5,722 homes for sale and 484 homes sold.  More than 300 fewer homes came on the market this February, compared to February 2008, easing the oversupply somewhat.  The homes that sold had an average sale price of $421,706, which is 25% less than last year!   

REO (real estate owned) properties (foreclosures) that sold numbered 23, including 4 in Gaithersburg, 4 in Germantown, 3 in Montgomery Village and 5 in Silver Spring.  There were also 12 short sales that sold in February.

As we head into spring, we will be able to see how healthy the local Montgomery County MD real estate market really is.