Median Price for New House in Montgomery County Climbs to $1.1 Million, Researchers Say

SILVER SPRING, MD – According to Montgomery County Planning Department researchers, the median price for a new single-family detached home in Montgomery County reached a startling $1.1 million in the first quarter of 2007.

Researchers found average prices for all types of housing increased 8 percent in the first quarter while prices were flat for the rest of the Washington, D.C. area. 

County prices for existing single-family homes and new townhouses decreased slightly but continue to average more than $500,000.

Researchers say that developers appear to be responding to the downturn in the housing market by focusing on building high-end houses for the affluent rather than meeting the housing needs of middle- and lower-income families. Read the full report at: http://www.mc-mncppc.org/research/documents/HousingBulletin091907_003.pdf

Aware of the housing trend, the Planning Board and other officials are working to provide affordable housing options. Current county law requires most residential developers to include a minimum of 12.5 percent moderately priced homes in their proposed plans. When the Planning Board approves 35 or more new housing units near Metro Stations, developers are required to build workforce housing units.

With County Council support, the Planning Board has placed even greater emphasis on the importance of affordable housing opportunities in the county, initiating a new housing study that will become a new element of the county’s General Plan. In June, the Planning Board directed its researchers to analyze county’s housing trends and examine where home prices tend to be lower. Researchers also will recommend ways the county’s most affordable neighborhoods can maintain their quality of life without endangering their affordability. Their report is expected to be delivered to the Planning Board in January.

Late this month, the board will send a revised set of growth policy recommendations to the County Council that – if adopted – will require developers to pay higher impact fees in order to offset the costs of infrastructure required by brand-new homes in existing communities. The board recommended that developers be required to pay a greater share of the cost to build new roads and schools.

Under the board’s proposal, developers of most single-family detached homes would need to pay about $31,000 in impact taxes. According to a variety of economic studies, those fees add costs to developers, not homeowners, and help existing residents receive adequate services.

“Developers are not having problems selling high-priced new homes, so we think they can contribute 3 percent of the revenues to help improve the roads and schools serving that new home,” said Planning Board Chairman Royce Hanson.

The Planning Board will review its growth policy recommendations on Sept. 27 and will present those to the County Council in work sessions starting Oct. 1.