Buyers In 2017, first-time buyers made up 42 percent of all homebuyers in the District and 28 percent of those in Montgomery County. Comparing the typical buyer in these areas, we see that District buyers are younger and earn about $20,000 less, and fewer are married couples. This could also mean that buyers in Montgomery County are more established in their professional and personal lives. However, we see that about 17 percent of all District transactions in 2017 were all-cash, versus 14 percent in Montgomery County.
CHARACTERISTICS OF HOMES PURCHASED
PROFILE OF A HOMEBUYER
According to the Profile of Buyers and Sellers survey, owners sell their house after nine years.
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We included only buyers who were 25 to 34 years old.
Regarding purchase characteristics, we found that District buyers in 2017 bought more expensive and smaller homes than Montgomery County buyers: the median District home value was $510,000 versus $460,000 in Montgomery County. Data shows that District buyers typically buy a two-bedroom home, while Montgomery County buyers typically purchase a three-bedroom home. It is true that these two areas have very different housing inventories. Based on the sales distribution by home type, 16 percent of homes sold in the District in 2017 were detached single-family homes, 37 percent were townhomes, and 47 percent were apartments. However, in Montgomery County, 54 percent of the sales were detached single-family homes, 22 percent were townhomes, and 24 percent were apartments. Thus, the typical home for sale in the District was smaller: about 1,060 square feet, versus 1,830 square feet in Montgomery County.
“Potential Sellers” Based on the Profile of Home Buyers and Sellers, homeowners usually sell their home nine years after purchase. The American Community Survey provides data for homeowners who moved into their house five to nine years ago. Let’s name these owners “potential sellers.” We found that potential sellers in the District of Columbia are typically 43 years old, and 47 years old in Montgomery County. In the District, potential sellers earn about $160,000, compared to $130,000 in Montgomery County. Also, the median value of their homes was $620,000 in the District and $450,000 in Montgomery County. Last, we found that 11 percent of the “potential sellers” do not have any mortgage or similar debt in the District, compared to 13 percent in Montgomery County. Thus, these mortgage-free owners can fully benefit from the price appreciation of their properties in the last five to nine years. It is estimated that home prices increased an average of 30 percent in the District and three percent in Montgomery County in the last five to nine years.
CAPITAL AREA REALTOR ® — Nov/Dec 2018 31