Kentlands Real Estate Report© 2012 – June, 2017 Hill District
The Faulkner Team
- As goes the Hill District, so goes Kentlands. The Hill recorded 40% of all detached and townhouse sales during this period.
- Average net price per square foot has a 7.6% growth rate during this period, second among Kentlands neighborhoods.
- Townhouses and detached homes are close in average net price per square foot, but the trend shows some opposite growth patterns.
You can download the full report at bit.ly/Kentlands-Hill
Overview and Terms
- “Much sought-after Kentlands” —- this phrase is in nearly every real estate marketing piece referring to homes in this community. As a realtor and a marketing consultant — and an 18- year Kentlands resident — the phrase still holds true. This unique community is known for its wooded parks, traditional architecture and new urbanist design. And my family and I would add the friendly and caring neighbors to this list.
- From the successful design of the community comes the value of its property. This report explores the selling trends that are behind the external qualities of this vibrant community.
- Kentlands home prices are rising but not as fast as they used to. There have been peaks and valleys before; the good news for sellers is that a well-maintained home has strong market potential. The good news for buyers is that there is a variety of housing inventory that steadily becomes available.
- But trends are not similar across the board. Property value is influenced by a series of dynamic relationships that impact this residential real estate market. Kentlands is comprised of districts — small neighborhoods — that vary in growth rates; and it incorporates a slate of categories including condos, townhouses and detached homes. Recent local property tax increases have affected sellers’ margins. The average length of time a home is available for sale in Kentlands has widened. Most homes are 20-25 years old. These are factors that are measured; more subjective measures, such as home buyers’ needs and the layout and upkeep of a home also bring unique circumstances to the analysis of the Kentlands market.
- I looked at selling trends from 2012 through June of this year — over 550 properties. I think it was a comprehensive analysis of all properties sold, but in case I missed a couple, I will say my search of the MLS (the real estate listing database) requested all properties sold “in Kentlands.” And 550 is in any case a large number of transactions for one community, and that quantity over time can support helpful analysis.
- Over this 5+ year period, median net sale prices of combined townhouses and detached homes increased from $606,000 to $710,000, a solid 17% growth rate. Per square foot condo prices rose from $206 to $235, also a healthy increase. But detached homes during the same period, also net per square foot, declined from $325 to $320. Tax assessed value for condos rose 18% over the 5 year period, but detached homes increased only 0.3%, and townhouses 7%. Yet one neighborhood in Kentlands — one of the districts — had an average increase in tax assessed value of over 24%. That doesn’t mean TAXES rose that much, but the average assessed value of the homes that sold during that period did.
- What does all this mean? And is there enough variance to warrant concern? And what do these terms show us? Realtors throw around a lot of terms and phrases and most of them are relevant to home values. Here are a few that I use in this report ——
- Median Net Sale. This is the sales price of the middle transaction during a given period. Median is helpful; because if a couple of homes sold at unusually high or low prices, the average of the total number is not as realistic to a typical home being listed for sale.
- Average Price Per Square Foot (PSF). Assessing the value of your home often starts with average PSF, and comparable homes in your neighborhood will present an average around which you can expect to sell if you wanted to list your home. In Kentlands, each neighborhood (district) has a variety of house categories, including townhouses, large detached homes, small cottages, etc., so using price per square foot, instead of net sale price, can reflect the relative value of the full variety of homes that either fit your neighborhood or match your house category.
- Tax Assessed Value. Our governments set property tax rates that are applied to the value of your home. In Montgomery County, the property taxes support many important services, like schools, roads, and safety. The tax rates are assessed on each property, and the assessment is adjusted each year (usually higher!) and applied to the value of your home. So tax assessed value is the government’s equivalent of your home’s worth for tax purposes. And the assessment is used by appraisers to establish value when you sell your home. When a home is purchased, it sells for a certain percentage over the tax assessed value. This percentage is an important factor in tracking increases (or decreases) in home values.
- Margin. The gap between how much it cost to maintain and sell your home and how much the sale of your home netted to you. A positive, or healthy margin is what you expect to gain (similar to a capital gain), and margins are influenced directly and indirectly by many factors.
- Days on Market. Simple — this is the length of time a home stays “for sale” between the date it is listed and the date it has a ratified contract. Average DOM is good for purposes of tracking large numbers of transactions. Median DOM is a little better because the outlier extended listing can skew practical results, so median presents a stronger view of a property or neighborhood’s supply-and-demand schedule.
- Why Now? It has been approximately 5 years since the Recession, so with relatively stable housing statistics, this is a good time to view comparative strength in the Kentlands market. And mid-year is a great time to prep for the fall and spring real estate markets. For those considering the value of their property, understanding historical data can provide valuable decision-making tools.Kentlands is a set of districts — neighborhoods — each with some unique characteristics but all knit together to form this distinct community of parks, lakes, retail, arts and new urbanist residential architecture. The Kentlands Real Estate Report is an analysis of the trends in sold properties within these neighborhoods over the period from 2012 through June, 2017.
Some of these neighborhoods are small and have been combined for the purpose of analysis. But the Hill District is large, not only because of its geographic footprint in Kentlands but also because of its density. Of the 267 transactions of townhouses and detached homes that I tracked over this 5+ year period, 108 were homes in the Hill, a full 40%.
3 Good Things You Can Do To Protect the Value of Your Home
1. Get Good Advice
If you are wondering about the value of your home, or how to increase equity to improve your financial options, or where to get the best unvarnished direction on who to use for home improvement, make sure you invest in the right set of professionals — realtor, attorney, financial advisor, contractor — to clarify your goals and take the next step.
2. Keep Your Home in Good Operating Condition
Clean out the gutters, correct any leaks, check out the roof, get the life span of your HVAC, clean your windows, replace carpet. These things don’t necessarily return dollar-for-dollar on investment, but they make a huge difference when you are getting ready to list.
3. Get Your Home Looking Good
If you are going to remodel, it’s always the kitchen and bath that gain the most attention. Then take a strong look at curb appeal — nice front landscaping, repainted or stained deck, maybe a patio. These are items that tend to make the highest return on investment. Plus, they make for a nicer home!
The Faulkner Team
The Faulkner Team starts with our team leader, Diane Faulkner. “Going the Extra Mile” reflects Diane’s leadership and our team’s entire philosophy —- negotiating price, analyzing market trends, interpreting value….and yes, bringing over artwork, fixing an appliance, letting out the dog —- taking every step and seeing the extra mile ahead to successfully get to settlement.
Steve Longley, Realtor The Faulkner Team firstname.lastname@example.org