While the Potomac real estate market has calmed down since October 2005, said Realtor Andy Alderdice, Potomac sellers have not been helping with closing costs as they have in other Montgomery County communities.
In recent months the Potomac real estate market has slowed from the gangbuster pace of 1999-2005. However, Potomac-area real estate agents report it is still healthy.
In the boom years, "It was almost a frenzy for the buyers," said Michael Matese, sales associate for Long and Foster’s Potomac Village office.
Realtors disagree when the most recent boom in Potomac real estate prices began. Some point to 1995, while others say 2000. Montgomery County’s home price increases started to accelerate in 1999, according to information from Weichert, Realtors.
When the Potomac real estate market was red-hot, buyers would put contracts on homes without home inspections, contingency clauses, or appraisals, Matese said. "It was a scary market for everyone."
In those years, Alderdice recalls that one house attracted 23 offers. Multiple offers for homes were common, real estate agents report.
Prices were commonly bid up 8 to 10 percent over the selling price, said Bob Moorman, manager of W. C. & A. N. Miller in Potomac. Offers frequently had escalation clauses, Matese said. Homes would sell in a weekend.
THE MARKET HAS cooled somewhat since last fall, several real estate agents said. However, Realtors were divided on just how calm the Potomac real estate market was.
"The last month has been a very big change," said Lorraine Gottlieb, real estate agent for ReMax Premier Selections in Potomac, on May 19. Things have been quieter. Potential buyers are waiting to see where the market will go.
Moorman disagreed, saying the market continued to surprise his office. He has continued to see multiple offers for homes.
The market is still good, if not as hot as it was a year ago, said Joan Reilly, branch vice president for the Potomac Village Coldwell Banker.
"Buyers don’t have to jump into something immediately," Reilly said. Realtors agreed there are now more homes on the market waiting for offers. Houses take longer to sell, Matese said.
"One of the changes is that the sellers have to make their houses look as nice as possible," Gottlieb said.
Reilly said prices were about at the levels they were a year ago. Gottlieb said they were about at February 2005 levels. These are a good deal for buyers because prices went up significantly in spring 2005, Gottlieb said.
In Potomac the median single-family home price in April 1998 was $379,500, according to Metropolitan Regional Information Systems. By this April the median single-family home price had risen to $942,500, a 148 percent increase.
Gottlieb said she sold homes under $1 million and that, "for Potomac that’s entry level."
The increase in single-family home prices in Potomac has been similar to that across Montgomery County. Whereas the Potomac prices have gone up by about 148 percent since 1998, single-family home prices throughout Montgomery County have gone up by about 145 percent in the same period.
Realtors generally agreed that it was the combination of available low-interest loans and a strong job market that led to the earlier boom in Potomac real estate prices.
Interest rates have been going up, Gottlieb noted, and the supply of homes on the market has also gone up. Together these have slowed price increases, Gottlieb said.
A healthy Washington job market has kept the area’s real estate market hotter than other cities’ regional real estate markets, Alderdice said.
For Potomac that means prices will be fairly steady over the course of the calendar year, Alderdice said.
Potomac buyers are generally civil servants, World Bank employees, technology company employees and managers, doctors and lawyers, Matese said.
They are generally seeking single-family homes. There are comparatively few townhouses available and essentially no condominiums, Matese said.