Usually the two Maryland suburbs that get the most attention are Bethesda and Takoma Park, but there’s a growing momentum for Kensington, Md. that we should all keep an eye on. MRIS data show this neighborhood is starting to see a greater amount of activity in its hyper-local real estate market.
One statistic that lets us know Kensington is growing in popularity is the Seller Success Rate. Below is the graph that compares whether the rate has gone up or down compared to the same month the year prior.
For Kensington, this past year shows many months have improved over the year before and even those that had a lower success rate were not as far away from positive change as things were a few years ago.
To get the Seller Success Rate, we add the number of closed sales to the number of contracts that fell through for any reason (financing, buyer changed their mind, inspection problems, etc). Those two numbers combined represent the grand total of listings that had the potential to close that month.
Since not all of them will close, we want to know the percentage that did reach a final sale. By dividing only the number of closed sales by the grand total of listings that had the potential to close, we come up with a percentage that tells us the Seller Success Rate.
So if homes are selling at a higher intensity that before, the next question becomes: Are prices showing an upward trend as well?
If they weren’t, the momentum behind the closed sales isn’t coming from buyers who are going to be owner-occupiers but more likely investors buying up homes that have depreciated in quality. In the case of Kensington, however, prices are definitely going up.
If you look back to 2008, right around the time of the Great Recession, and compare it to where we are now, you can see a significant difference.
As expected, the Days on Market has decreased significantly as well. It has been less than two months solidly for the past year and a half, and we expect it to stay in this range for the coming year.
Kensington might be the sleeper suburb of the upcoming year. It has always been on the periphery of the other more popular neighborhoods in Maryland’s suburbs, but from a strictly numbers point of view we predict it to grow in popularity.
Corey Hart is the Senior Product Manager and data analyst at RealEstate Business Intelligence, a subsidiary of MRIS.