At the annual Greater Bethesda-Chevy Chase Chamber of Commerce’s Real Estate Update on Friday morning, realtor Jane Fairweather said the first wave of resales in Bethesda’s existing luxury condo buildings has produced less than stellar results.
Fairweather said two of downtown Bethesda’s newer luxury condos — Lionsgate and the Adagio — sold out a little less than a year ago. There have been six resales at the Lionsgate and two at the Adgaio. Sellers got less money than they paid for the units in five of those eight cases.
The person who bought the first unit in the Lionsgate lost about half-a-million dollars on the resale, Fairweather said.
The average resale price for a luxury condo in Bethesda is $579 a square foot. The new condos coming in are asking for anywhere from $750 to $1,500 a square foot, including The Lauren, which is listing condos for $2.1 million to $7.5 million.
“I think that’s audacious,” Fairweather said.
Still, Fairweather told the audience she doesn’t think the so-called Bethesda Metro housing boom is a bubble because inventory is very low. Fariweather said a normal healthy market level is six months worth of inventory. Bethesda-Chevy Chase at between one and three months inventory in several zipcode. The national average is about four months.
The bigger issue for the Bethesda-area housing market could be affordability.
Fairweather cited a Montgomery County report that estimated a household income of $120,000 would not be enough to buy a house by 2030. Some one bedroom rental properties include income requirements at $65,000. Larger one-bedroom units can include income requirements of $86,000.
“There really is a shortage of housing that can accommodate workers all along the wage spectrum and if we can’t accommodate them they will not be here,” said Lisa Sturtevant a professor at George Mason University who studies local real estate trends and who served as the event’s keynote speaker. “That will have an effect on the economy.”
Another luxury condo is in the works for 4990 Fairmont Ave., at the site of the closed BP gas station. Chevy Chase-based Starr Capital and partners is planning a 17-story, 70-unit condo for the site.
Some other noteworthy real estate trends from the past year:
According to Fairweather, arts and crafts infill homes are “the new face of Bethesda-Chevy Chase.” In 2012 and 2013, 138 existing homes wore torn down and replaced with arts and crafts style homes in single family neighborhoods close to downtown Bethesda.
The difference in price for homes within walking distance to downtown Bethesda and homes that require car travel is significant: Homes within walking distance range from $2 million to $5 million. Homes out of range typically fall in the $1.2 to $1.8 million area.
The teardown trend sweeping Bethesda is good for longtime homeowners making profits off of sale prices. But Fairweather said “we are definitely losing affordable housing.”