Housing Market Shortage Washington DC Area

Navigating the U.S. Housing Market Shortage: What It Means for Arlington, Bethesda, Chevy Chase, Falls Church, McLean, Potomac, Vienna, and Washington DC

1.5 million homes shortage in the United States per freddie mac

The recent analysis by Freddie Mac reveals that the U.S. housing market is currently 1.5 million units below a balanced market, highlighting a significant undersupply of homes available for sale and rent. This trend has critical implications for both buyers and builders, especially in high-demand areas like Arlington, Bethesda, Chevy Chase, Falls Church, McLean, Potomac, Vienna, and Washington DC.

Understanding the Housing Market Imbalance

The Freddie Mac report emphasizes that the current housing market is characterized by a notable undersupply. Historically, the market has fluctuated between periods of oversupply and undersupply, with significant peaks and valleys.

Since the 2008 financial crisis, the market has seen a continuous reduction in the number of available housing units, culminating in the current shortage.

This shortfall means that demand for homes outstrips supply, driving up competition and prices.

What This Means for Home Buyers in the DMV Area

For potential home buyers in Arlington, Bethesda, Chevy Chase, Falls Church, McLean, Potomac, Vienna, and Washington DC, this market imbalance means higher competition for fewer available homes.

Buyers need to be prepared to act quickly and decisively to secure their dream home.

Partnering with a knowledgeable real estate developer and having financing pre-approved can provide a significant advantage in this competitive market.

Opportunities for Custom and Speculative Home Building

As a leading builder of custom and speculative homes in these sought-after areas, Paramount Construction, Inc. is uniquely positioned to address this housing shortage.

Here’s how:

Largest List of Tear Down Lots

We have the largest list of teardown lots in Arlington, Bethesda, Chevy Chase, Falls Church, McLean, Potomac, Vienna, and Washington DC.

This extensive selection ensures that your new home will be located in a prime spot with access to excellent schools, amenities, and vibrant communities.

Custom Homes Tailored to Your Needs

We specialize in designing and building luxury custom homes that cater to the specific needs and preferences of our clients.

Our team works closely with you to create a home that reflects your unique style and meets your highest standards of quality and comfort.

Speculative Homes Ready for Purchase

In addition to custom homes, we also build speculative homes designed to meet the demands of discerning buyers. These homes are under construction or move-in ready, offering modern amenities, high-quality construction, and beautiful design.

Innovative Building Practices

Our commitment to using the latest building technologies and sustainable practices ensures that your custom or speculative home is not only beautiful but also energy-efficient and environmentally friendly.

The Benefits of Building or Buying a Home in an Undersupplied Market

In a market with limited available housing, building a custom home or purchasing a speculative home offers several distinct advantages:

Personalization: With custom homes, you have the freedom to design every aspect of your home, from the layout and architectural style to the finishes and fixtures.
Modern Amenities: Both our custom and speculative homes are equipped with the latest technologies and conveniences, offering a higher quality of living.
Investment Value: Homes in desirable locations like Arlington, Bethesda, Chevy Chase, Falls Church, McLean, Potomac, Vienna, and Washington DC tend to appreciate in value, making them a sound investment.

Spec homes for sale in Bethesda — Bethesda home for sale near Walt Whitman High School

Partner with Paramount Construction, Inc. for Your Custom or A Home Under Construction

Navigating the current housing market can be challenging, but with Paramount Construction, Inc., you have a trusted partner dedicated to making your dream home a reality.

Our expertise in custom and speculative home building, combined with our extensive list of teardown lots, makes us the ideal choice for discerning buyers looking to build or purchase a luxury home in these prestigious communities.

Contact us today to learn more about our custom and new homes under construction building services and how we can help you take advantage of the opportunities in the current housing market. Let’s build the home of your dreams in the DMV area.

More new homes under construction for sale and lots for sale:
*Chevy Chase – 4812 Chevy Chase Blvd. – downtown Bethesda – under construction
*McLean – 15K SF lot – McLean HS – private list – call or text to learn more 301-370-6463
*Bethesda – 1/2 Acre – Churchill HS – private list – call or text to learn more 301-370-6463
*McLean – 17,800 SF Flat lot – McLean HS
*Bethesda 6008 Kirby Road – 12,700 SF lot – Walt Whitman HS – new home to be built
*N. Arlington 6317 Street N. – 13,000 SF – Yorktown HS – new home to be built
*Bethesda 6820 Marbury Road – 11,500 SF lot – Walt Whitman HS – under construction
*Bethesda – 4922 Earlston Dr. – Bethesda blocks to Westbard Square – under construction

New Home Services:
*Access our wholesale acquisitions list & beat the competition – call 301-370-6463
*How much does a new home cost? Find out here

U.S. Housing Industry Scores A Win As House & Senate Vote To Increase Home Mortgage Limits to $729,750

This should help buyers of homes in our Maryland, Washington D.C. and Virginia suburbs:

http://www.bloomberg.com/news/2011-11-18/u-s-congress-votes-to-raise-top-limit-for-government-insured-mortgages.html

Housing Industry Wins Higher FHA Mortgage Limits
By Phil Mattingly – Nov 18, 2011

The U.S. housing industry has scored a victory with House and Senate votes to raise the size of mortgages backed by the Federal Housing Administration to $729,750.

The measure split Republicans, many of whom supported retaining the lower limit of $625,500. As a result, efforts to restore the higher limit fell short until the Senate attached an increase to a package of spending bills that were passed yesterday by both the House and Senate.

The higher FHA limit is expected to become law after the president signs the spending measures, which he must do by the end of today to avoid a government shutdown.

“Restoring the higher loan limits for the FHA will provide homeowners and homebuyers with safe and affordable financing, while providing a much-needed boost to housing markets all around the country,” James W. Tobin, chief lobbyist for the National Association of Home Builders, wrote in a Nov. 16 letter to Speaker John Boehner, an Ohio Republican.

Lawmakers who backed higher limits said withdrawing federal support could further undermine a housing market still struggling to recover from the 2008 credit crisis.

The final compromise, which dropped a similar increase to loans backed by mortgage firms Fannie Mae and Freddie Mac, represents a mixed victory for the housing industry.

While the increase to $729,750 is expected to spur some additional homebuying, it’s not clear by how much. FHA loans make up a smaller share of the market than those purchased by Fannie Mae and Freddie Mac.

5.3 Million Homes

Still, the measure was fully embraced by trade groups for homebuilders and realtors. The National Association of Homebuilders has estimated that 5.3 million homes lost their eligibility for conforming loans when the higher limits expired on Oct. 1. Nearly 670 counties saw their loan limits decline, according to the National Association of Realtors.

On the other side were a number of interest groups that push for free-market policies and against government support to the housing market. Those groups, which include the Club for Growth and Heritage Action for America, play a large role in the House Republican conference and can influence campaign funding for the next election.

Republicans backed by the groups thought efforts to increase the loan limits had been defeated earlier this year, particularly when the White House announced support for allowing them to go back down to pre-crisis levels.

‘Completely Bizarre’

“This is completely bizarre that the Congress would be to the left of this president on housing finance,” Representative Patrick McHenry, a North Carolina Republican on the House Financial Services Committee, said in an interview.

House Republicans who opposed the provision seized on the FHA’s annual actuarial report released earlier this week, which said the agency has a 50 percent chance of needing to seek taxpayer aid to bolster its insurance fund.

The FHA, which provides liquidity by protecting lenders against borrower defaults, has increased its share of the mortgage market in the wake of the credit crisis. The agency, created in 1934 during the Great Depression, now guarantees a third of U.S. mortgages, according to the report.

The House-passed legislation, approved in a 298-121 vote, was opposed by 101 members of the House’s Republican majority, some of whom said they opposed the measure primarily because of the loan-limit increase.

Representative John Campbell, a California Republican who pushed for the increase, called the compromise on the provision “just a bad deal.” Campbell said he would have preferred that lawmakers boost the limit for Fannie Mae and Freddie Mac over raising the FHA limit.

‘Short-Term Fix’

“I’m glad something got done, but because they got it backwards, this will be a much more short-term fix than I would have hoped,” Campbell said in an interview.

The Senate followed the House’s lead a few hours later, voting 70-30 to clear the measure for Obama’s signature. The provision was once again cited by several Republicans as a reason for their opposition.

“Raising the loan limits at FHA only, an unprecedented move, will simply drive more business into Ginnie Mae securities and put the FHA at even greater risk of losses to taxpayers,” Senator Bob Corker, a Tennessee Republican, said yesterday. “If we cannot even take this simple step, we risk crowding out the private sector for years to come.”

To contact the reporter on this story: Phil Mattingly in Washington at pmattingly@bloomberg.net.

Could It Be Perfect Timing for Purchasing A Home in Bethesda Maryland?

When is the Best Time to Buy a Home in Bethesda, Maryland?

When is the best time to buy in homes Bethesda

With owning a home affordability getting tougher and home mortgage rates relatively high compared to the 2020, but, still near historically low, when you look at long term mortgage rate graphs, you timing could be perfect for buying a new home in Bethesda.

And in very strong home buying Bethesda market and surrounding areas (at least inside the Washington DC beltway -Arlington, Chevy Chase, Falls Church, McLean, Vienna and Northwest Washington DC – specifically), there are many options to consider.

But before you start contemplating about the home style and number of bedrooms, here’s a real quick overview of some segments of the Maryland, Virginia Washington DC housing market.

1. “Resale” homes probably represent the biggest percentage of the market. Built years, or even decades ago, these homes were designed and built to reflect the requirements and the tastes of previous owners. They may be outfitted with outdated fixtures and technologies, and have poor construction. Buyers of these homes often fall in love with them for their character, their location or their “good-enough” fit with their needs, and accept the necessity of investing additional time and resources in remodeling and rebuilding.

spec homes custom homes resale homes in Bethesda

2. “Spec” homes are built based on the speculation that a buyer can be found during or shortly after construction. These new homes may be designed with up-to-date floor plans and features to fit current preferences. When acquired before completion, a buyer may be able to select some finishing touches. But this type of home construction may also be designed to minimize cost and get the largest proceeds for the home builder, potentially leaving homeowners with less than the best materials and designs that are not as contemporary.

3.“Custom” homes are built according to the buyer’s specifications, usually on land they already own. While this type of new home construction embodies only ten percent of the market, it gives the homeowner the most control. Working with an “on your lot” custom home builder, the buyer determines all facets of home construction—from site selection to the home’s style, size and floor plan, types of windows and doors, flooring and siding, and all the details—cabinets, lighting fixtures, drawer pulls, paint colors, etc.

While “on your lot” home builders are sometimes thought of as large home builders, they can also accommodate today’s trend towards “right-sizing”. These days a custom home builder may work on smaller homes starting around 2500 square feet. Benefits include keeping material and labor costs lower and customizable floor plans.

The Best Time to Buy a Home in Bethesda, Maryland

Buying a home is one of the most significant decisions you’ll make in your life. It’s not just about finding a place to live; it’s about investing in your future. The timing of this decision can greatly impact the value you get from your investment. This is especially true in Bethesda, Maryland, a city known for its highly desirable real estate market.

Understanding the Bethesda Real Estate Market

Bethesda Maryland Real Estate Market — Downtown Bethesda

The real estate market in Bethesda is unique due to its inelastic supply of homes and land. With high demand driven by top-rated public schools, an abundance of high-paying jobs, and close proximity to Washington DC’s museums, attractions, and restaurants, Bethesda offers an exceptional living environment. This constant demand paired with limited supply means that the best time to buy is always now. Waiting for the “perfect” moment can result in higher prices due to the ongoing demand.

Interest Rates: Historically Low and Temporary

Even though today’s interest rates of around 6.7% are higher than the exceptionally low rates of 2020, they remain relatively low from a historical perspective. Over the past 30 years, interest rates (see Freddie Mac interest rate graph below) have been much higher. In the 1990s, rates often exceeded 8%, and in the early 2000s, they hovered around 6-7%. The ability to refinance also means that current rates are temporary; you can always secure a better rate in the future. On the other hand, home prices in Bethesda are unlikely to decrease over the long term due to the inelastic supply and steady demand.

30 year graph of mortgage rates. Interest rates are still historically low — 30 Year Interest Rates – Current Interest Rates Are Still Historically Low

The Impact of High Demand and Limited Supply

Bethesda’s real estate market is characterized by its inelastic supply. There is only so much land and a limited number of homes available, while demand continues to grow. This imbalance drives up home prices over time. The city’s appeal—excellent schools, job opportunities, and vibrant lifestyle—ensures a steady influx of potential buyers. This means waiting could only increase the cost of your desired home.

The Impossibility of Timing the Market

Timing the Bethesda real estate market is impossible

It’s important to understand that timing the market is virtually impossible. This is true for any market, and the Bethesda real estate market is no exception. Real estate is a long-term investment, not akin to day trading stocks. Over the years, real estate consistently appreciates. Historical data shows that despite short-term fluctuations, the value of homes in desirable locations like Bethesda tends to rise over the long run. Trying to wait for the “perfect” time to buy can result in missed opportunities and higher costs.

Personal Circumstances

While market conditions are crucial, the best time to buy a home also heavily depends on your personal circumstances. Here are a few factors to consider:

Financial Readiness: Ensure you have a clear understanding of your budget and what you can afford, including the purchase price, property taxes, insurance, and maintenance.
Job Stability: A stable job and predictable future income make it easier to commit to a mortgage.
Current Housing Situation: If your lease is ending or you need more space due to family changes, it might be the right time to buy.
Long-Term Plans: If you plan to stay in Bethesda for several years, buying now can lock in current prices before they rise further.

Conclusion

In Bethesda, Maryland, the best time to buy a home is today. The combination of high demand, limited supply, and the area’s many attractions means prices are likely to continue rising. By understanding the unique dynamics of the Bethesda real estate market and considering your personal circumstances, you can make a well-informed decision.

For all these reasons, today is the best time to buy, and the second best time to buy is tomorrow. Remember, buying a home is a significant investment. Take your time, do your research, and make sure you’re financially prepared. With patience and careful planning, you’ll find the perfect home at the perfect time—today or tomorrow, but ideally, before prices climb even higher.

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