While the Montgomery County real estate market is currently seeing an increase in new listings, local real estate agents say buyers are still deterred by the low supply.

According to a real estate statistics report released in July by the Greater Capital Area Association of Realtors (GCAAR), “prices and completed sales are up year-over-year, but stability is emerging.”

Last Tuesday, the association released its July housing statistics for the Washington, DC, district and region. According to the report, there were 1,524 completed sales in the region, up 3.5% from a year ago, and the average sales price for all residential properties was $836,200, up 6.8% from the same period last year.

Bruce Cotting, a real estate agent with The Kensington Group and RLAH Properties based in Chevy Chase and a member of GCAAR’s board of directors, told MoCo360 on Thursday that the county has been struggling with a housing shortage for five years.

“COVID has exacerbated the situation because everyone has had the opportunity to move, and now that’s kind of trickling down,” Cotting said. “There are more people moving into the area than there is housing available, and we’ve certainly seen a big increase in new home sales.”

Comparing the summer to the same time last year, Cotting also said local real estate agents are seeing an increase in homes under contract and an increase in listings on the market. “But that demand (for homes) hasn’t caught up with the minimal increase (in listings) over the last month or so,” he said.

In July, the median sales price for single-family homes in Montgomery County was $635,959, down 2.2% from June but up 5.3% from the median sales price of $604,000 in July 2023, according to GCAAR statistics.

The average number of days single-family homes in the county were on the market in July – 17 days – remained the same as in June.

The number of new listings decreased from June to July, from 936 to 880 new listings in the county, but represented an increase of more than 5% compared to the number of listings in July 2023.

The regional condo market remained stable from June to July, with the median sales price at $350,000 – a 3% increase from the same period last year. In addition, closed sales increased 12% from 2,201 to 2,465 closed sales as of July 2023, according to GCAAR statistics.

“My personal assessment is that we are moving in the right direction as more and more listings are coming onto the market,” said Cotting, who focuses primarily on the south county area. “I hope sellers realize this is a strong step in the right direction to address the inventory shortage.”

Among those looking for a new home are families who need more space, Cotting says. He believes these buyers are adding value to the housing market by offering their own homes.

“But those same buyers are facing this challenge again. There aren’t enough out there. We’re finding that buyers from the county … who want to move up or vice versa, so downsize, we don’t have enough to appeal to them,” he noted.

As has been the case for several years, homes are under contract as soon as they hit the market. Cotting said he has experienced several situations where a home was for sale and “before you could show it, almost as soon as you scheduled a viewing, the property was already under contract.”

Typically, Cotting said, the housing market slows in August and activity in July will “erode.” He suspects buyers are waiting to see if interest rates fall, and when that happens, there will be a “starvation” of homebuyers.

“We’re now past COVID, and the impact we’re still living with is interest rates,” he said. “Interest rates started coming down in late July, and in early August we started to see a rebound in activity. But it’s certainly not where it would have been years ago.”

In the report, GCAAR President Christopher Suranna said the association was “optimistic that lower mortgage rates are on the horizon this fall,” giving more first-time buyers the opportunity to enter the market.

“Meanwhile, condos are still a cheaper option compared to single-family homes,” said Suranna.

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