So you’re wondering what’s going on in the Kensington real estate market these days? Well you’ve come to the right place, because that’s what we’re talking about today, and we are starting right now. Today we’re going to take a look at a summary of the Kensington Market for the first quarter of 2019. This area includes the entire Kensington zip code of 20895. Real estate is a hyper-local business, and there are quite a number of submarkets in Kensington, based on location and price range. However, it’s always good to step back and get a sense of what’s going on at the broad market level. So let’s take a quick look. All of these numbers are from Bright MLS, which is the database that most agents use, and where the majority of the real estate websites derive their information and data from, so we are going straight to the source.
We’ll start with a chart that I really like, one that shows the balance between supply and demand. First, we’ll look at the supply side. As you can see, total active listings have moved up about 20% and new listings are up by over 100%. This is part of the normal seasonal cycle. We were heading into the spring market, which is the busiest time of year. Everyone wanted to put their house on the market when the azaleas were in bloom. On the demand side, new pending‘s are up substantially as well. Not quite as large an increase as new listings, but the smaller increase in total active listings shows that demand was mostly keeping pace so far.
For an interesting historical perspective here is the change year-over-year in the same data. Here you can see on the supply side, the total number of active listings are up vs 2018, by about 13%. New listings are up year-over-year as of March by about 2%. Whereas pendings which are the demand-side of the equation have moved up by almost 65%. So you’ve got higher supply, but even stronger demand, and that means prices moving up. You’ll notice the upside down movement in February, Again,this is related to the normal seasonal ebb and flow of the market. Usually supply moves up first, as people start to put their homes on the market, then we watch to see if demand keeps pace, this March it certainly did!
Now let’s move onto the median days on market. As you can see in January it was 92 and it has moved down dramatically to 28 days on the market in March. This is also tied to the transition from the winter market to the spring. A lot of houses that go under contract and settle in December and January have been on the market during the slowest time of year and were unable to sell, so they will show longer days on market when they do finally get an offer and go to settlement. As more “fresh” inventory comes on the market in the spring, the properties that go under contract tend to show lower days on market.
This next chart shows the ratio of the sale price to original list price for properties that settled in the first quarter. In January, it was 97.7% and that moved up to almost 100%. That means that most houses that went under contract this year and settled in March sold for full price. Part of this is tied to the last chart. Properties that stay on the market longer tend to attract lower offers.
Let’s take a quick look at the past 10 years, just to give you a little historical perspective. You can see that the lowest number was in October of 2010 when the median was 90.6% of the asking price. That has steadily moved up over the past 9 years and has basically been hovering between 96 and 100% since December 2015.
Now let’s move onto the months of supply. As you can see although it’s moved up slightly it’s still just under 2 months of supply. A balanced market nationwide is generally considered to be about six months worth of inventory. In the DC metro area, I would say that number is probably closer to four, maybe 4 1/2 months worth of inventory. At 2 months it’s in seller’s market territory for sure.
Again let’s take a quick look backward for historical perspective. In September of 2010 it peaked at 5.7 months of inventory. It’s been trending down consistently since then, and has been below 4 month’s worth of inventory since August of 2012.
And finally, the one that most people focus on is the trend in sales prices. As you would expect with inventory sliding down, prices have moved up in the first quarter. This chart shows a big jump in Median Sold prices, which is somewhat misleading. The January sales price was much lower than it had been in prior months and was impacted by the small number of properties which went under contract in December of 2018 ( only 8 properties went pending in that month). That very small statistical sampling, could be easily skewed downward by just one or two inexpensive houses settling that month.
So the picture overall is that the market that is still favoring sellers, although things may be trending towards a more balanced market if inventory keeps increasing later in the spring. There are big differences between submarkets and price ranges. Having a skilled professional agent on your team will help you to understand the nuances of the market so that you can make the best decisions regarding your real estate needs.
If you’re interested in a more detailed analysis of what’s going on in your immediate neighborhood, or in a part of Kensington where you are thinking of buying, reach out and let me know. I’m happy to put together some neighborhood-specific data for you.If you know someone, maybe a friend or neighbor, who might benefit from this information, please share this blog post with them.