Cheverly Market Update -March 2019

Quick take on the March 2019 Cheverly real estate market

In hopes of not banging my head against the wall, I thought I would put some words on paper…and hopefully clear up some confusion about the Cheverly market. The head-banging is from the Redfin email that went out to lots of Cheverly residents saying that the median sales price in Cheverly was $507,017 in February. This has prompted many texts and emails asking me if it’s true. One – it’s not true because they left off one sale that brings it down quite a bit. Two – 3 sales does not indicate a trend. That’s right, there were a whopping 3 sales in February.

Okay, let’s talk about the market – there is a difference between having some sales above $500,000 and being in a $500,000 market. We definitely fall into the first category but not so much in the second category. Is the trend moving upward? Definitely! Are we headed for the stratosphere? In my opinion, no!

Ready for a deep dive into our market statistics? Let’s go!

Here’s the breakdown of sales ranges over the past 12 months.

As you can see from the chart above, most of our sales are solidly in the $300,000 range. But knowing that doesn’t help until we dig a little deeper and see what characteristics distinguish each price range.

$299,999 and below is fairly easy – most of these are either small homes and/or need significant updates. What we in the industry describe as having “deferred maintenance” or simply being “dated.” Many of these are also what we call “distress sales” – they are foreclosures, bankruptcies, short sales and often estate sales.

The majority of our sales are in the $300,000 to $399,999 range. These houses reflect the way most of us live in our homes. We update items as they need replacement, so we end up with old bathrooms and a new roof or new HVAC system. Or an updated kitchen and an unfinished basement. Even more so, we might have a new refrigerator, but an old stove and a dishwasher that doesn’t work and has been used as a drying rack for years. As a rule, the higher you go in the $300,000s, the more features are updated and improved but it’s still mostly a mixture of dated and updated.

Then you look at the $400,000 price range. With one exception (the Bellamy house), these are completely renovated by an investor or “flipper,” or are substantially and recently updated with quality, love and care by the owners for their own enjoyment. However, the vast majority of these sales are renovated by investors who bought the house for the exact purpose of fixing them up and re-selling them. Getting inundated with mailers advertising “we buy houses?” This is why. These investors know that Cheverly is a desirable market and that buyers are willing to pay more to get everything new. And that some sellers are willing to take less than market value just to get out from under. Okay, now we get to the $500,000 and up homes. Just a reminder, that 4% in the chart is made up of 3 homes. All built pre-1930 and all completely renovated. In other words, rare. That we’ve had 3 of these particular types of homes on the market in such a short period of time is as rare as the homes themselves.

Just how many of those homes do we have in Cheverly, you might ask. There are 61 of those homes in town. Out of 1,804 homes. We just don’t have that many of these particularly desirable homes ready to sell and even fewer of them have been renovated top to bottom.

I won’t be surprised to see a few more sales in the $500,000 and up range – but there is likely to be something exceptional that pushes the sale that high. We’ve only had 9 homes EVER sell above $500,000 and 4 of them were new construction, like those on Jocelyn St.

I’m not saying that our prices aren’t going up, but they certainly aren’t going up as fast as some would have you think. The Redfin email isn’t even useful when it has only 2 properties on it and is missing sales that are certainly within our town borders. And keep in mind that such a limited look doesn’t take into consideration other things that affect the market, like government shutdown and blizzards!

The biggest part of the pie to watch are those in the $400,000 range. If we start seeing houses that reflect the way we live – some updating here and there, but only as it needs it – move into the $400s, then we’ll know that the market has truly moved upwards. Until then, we are still firmly in the dual market world – those that are completely updated and then the rest of us.

The Spring market is heating up! Cheverly is always gorgeous in the Spring, so if you’re thinking of selling, let’s talk about what it takes to get your home on the market and what it takes to get the most money for your house. I’d love to talk to you about selling your home!

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New MLS – what does it mean to buyers and sellers?

We have a new MLS – Multiple Listing Service – in the Maryland-DC-Virginia area. Actually, it is a huge database, covering Delaware, Maryland, New Jersey, Pennsylvania, Virginia, Washington, D.C, and West Virginia. Most agents aren’t licensed to sell real estate in all those areas, so this doesn’t mean we can automatically practice our business everywhere.

However, there are some excellent new features that should make buyers and sellers happy, not to mention their agents! First benefit for me is that we can add more than 30 photos – that was our old limit. Another excellent feature is the ability to write descriptions in plain English – before we had a 400 character limit, which included punctuation and spaces, to describe a property. That lead to horrible descriptions like “3br 2ba, sgd 2 deck frm dr.” Now we are free to write “3 bedrooms and 2 full baths, plus sliding glass doors to the deck from the dining room.” We have 4,000 characters available to us! I’m in sheer heaven!

There are still some glitches, as they try to combine all these different MLS’s. I can’t search – yet – for all the homes in a specific municipality, like Cheverly. I’ve already requested the field be added, since it is available to us in the tax records. Should be an easy fix.

The biggest change – and it will affect everyone – is how we define the number of days a home is on the market. In the past, as soon as a contract was accepted, the MLS stopped counting the number of days the property was available, even when there were contingencies to be met. It wasn’t unusual to see a house that was only on the market for 2 or 3 days. Now we have a new category – ACTIVE UNDER CONTRACT – and the count doesn’t stop. This means that buyers can still make appointments to see a house that is in this status, and on all those ancillary sites like Zillow and Realtor.com, they will still show as Active.

As a result, it will look like it is taking houses longer to sell. That’s not necessarily the case, but after a while, we won’t notice the change.

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Shifting market?

In the past 30 days, we’ve seen a shift in activity that indicates a slowing market. The question to ask – is this temporary, seasonal, or just the normal ebb and flow of markets in general? No markets keep steaming forward indefinitely. Sometimes they slow their step, take a breath, and then steam forward again and sometimes they slow for a more extended period. My suspicion is that it’s the latter this time as we are about due for a shift to a more balanced marketplace.

Today, we have 17 houses on the market in Cheverly – more at one time than we’ve had since July 2017. You can see by the charts below how different this year’s market looks from last year. (Note that November 2018 only represents 4 days.)

Here are just the past 30 days of activity in Cheverly:

  • 14 new listings – that’s a lot of new listings, particularly going into Thanksgiving
  •  2 back on the market – we are seeing more contracts fall through
  • 6 price reductions – price reductions are a harbinger of a slowing market.
  • 6 under contract – but as I mentioned, 2 came back on the market. The number of homes going under contract has slowed while inventory has risen.

Only time will tell if this slow-down is temporary. But 14 new listings since October 1st and only 2 under contract in the same time is represents a definite shift. Our real estate news feeds are full of articles about how to deal with a slowing market, so it’s obvious that it is being felt in other marketplaces as well.

As you can see, I track the Cheverly market closely!

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Helpful Data for Appealing Your Tax Assessment – Part 4 of 4

Here is the data to find your comparable sales. Part 1 of this series will give you an idea of how to use this data, but if you are confused or want further advice, call the Department of Assessments. They are very helpful and really want your assessment to be right!

Prince George's County
Department of Assessments and Taxation
Maryland Department of Assessments & Taxation
14735 Main Street, Courthouse
Upper Marlboro, MD 20772
301-952-2500 (phone)
301-952-2955 (fax)
www.dan.puma@maryland.gov

To find out if you are protected by the Homestead Tax Credit, go to http://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx and scroll to the bottom. You do not qualify if the house is not your principle residence. If you want to see if the credit was applied on your current bill, go to http://taxinquiry.princegeorgescountymd.gov/

The Excel spreadsheet with all MLS sales in 2017, sorted by sold price:

Detail of each sale – Updated 1/21/18 Updated Cheverly sales detail description

Same info, all updated 1/21/18, sorted by:

Other articles in this series:

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Appealing Your Tax Assessment – Part 3 of 4

A little about the Homestead Tax Credit:

From SDAT: “To help homeowners deal with large assessment increases on their principal residence, state law has established the Homestead Property Tax Credit. The Homestead Credit limits the increase in taxable assessments each year to a fixed percentage.”

If you feel your assessed value is too high, but decide not to appeal, particularly if you are protected by the Homestead Tax Credit, that is your choice. However, if you think you might sell within the next 3 years, it might still be worth appealing as your buyer will have to qualify on the full amount of the tax payment. Buyers don’t get the protection of the tax credit until they’ve been in the house for a year.

The Homestead Tax Credit does not affect your assessed value. It affects your payment. You may appeal your assessed value and still not see a marked reduction in payment because of the cap that is in place due to the tax credit. And even though you just got the assessment letter, you won’t know what the actual tax bill will be until July.

For example, if your home assessed at $400,000 and you think it is only worth $300,000, you might choose to appeal. However, if you already are protected by the Homestead Tax Credit, your actual payment might not change by much. BUT – if you sell, then the buyer has to qualify on the full tax payment for that $400,000. So even if it doesn’t change your payment, it is still worth challenging.

To find out if you are protected by the Homestead Tax Credit, go to http://sdat.dat.maryland.gov/RealProperty/Pages/default.aspx and scroll to the bottom. You do not qualify if the house is not your principle residence. If you want to see if the credit was applied on your current bill, go to http://taxinquiry.princegeorgescountymd.gov/

More in this series:

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