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MARYLAND REAL ESTATE HOME PRICES - YEAR END REPORT AND TRENDS

WE BELIEVE THAT IT IS OPPORTUNITY TIME FOR HOME BUYERS IN MARYLAND REAL ESTATE

PAY ATTENTION TO THE TRENDS. Recent Statistical Report for number of closed sales indicates that prices in the Maryland real estate market are holding and even increasing in some counties. However, the news is not the prices of the homes that closed in December 2007, but rather the real story is the number of closed sales, then number of days from list to close and the trends.

The Chart below shows the change in sold prices, which remained relatively stable from December 2006 to December 2007. However, the TRENDS are for fewer homes selling and homes staying on the market longer.

MARYLAND COUNTY SOLD PRICE PRICE CHANGE PRICE TREND DOM TREND

COUNTY	SOLD Price	Price Change	#Sold Change	DOM Change
Anne Arundel	$395,990	-3.98%	-24.77%	14.02%
Baltimore	$309,021	5.44%	-32.71%	35.21%
Calvert	$405,265	7.77%	-39.24%	39.68%
Carroll	$345,820	0.42%	-21.32%	38.94%
Charles	$321,100	-8.39%	-45.98%	96.10%
Frederick	$326,373	-5.70%	-26.27%	54.26%
Howard	$463,153	0.71%	-28.47%	26.51%
Montgomery	$519,017	1.19%	-40.19%	36.14%
Prince George's	$336,506	-3.07%	-55.68%	78.79%
Washington	$227,698	-5.12%	-28.95%	30.00%

Maryland Map

FORECLOSURES AND SHORT SALES ARE BRINGING AVERAGE PRICES DOWN. While still a small percentage of total sales, Foreclosure Sales, REO Sales and Short Sales are affecting the appraisals. While not all real estate agents or brokers include foreclosure or short sales in their pricing advice to home sellers, appraisers do consider these homes when they appraise the properties for loan approval for the financing bank. Further, many underwriters and investors are now reducing the amount they will finance in areas where the home prices are trending down. Also, many investors are only accepting appraisals for homes that closed within the most recent 90 days rather than the traditional 6 months sales

IS YOUR AGENT'S PRICING RECOMMENDATION INCLUDING FORECLOSURES AND SHORT SALE? When a consumer obtains a Competitive Market Analysis from a real estate agent, they need to ask if there were any closed foreclosures or short sales omitted from the analysis. While a home owner has the absolute right to price their property for sale as they wish, a home owner can only benefit from considering all of the recent sales in an area. If a home owner receives several CMAs and they include different sold properties, a wise seller will ask why. Home owners cannot rely on on line resources for accurange pricing comparisons because the programs that produce the data have not seen the properties, do not know the communities and can't make adjustments for additions, upgrades, amenities or condition.

WHEN EXPERIENCE COUNTS. Only an experienced real estate agent or broker has the knowledge, experience and data to be able to provide a home owner seller with accurate pricing information. It's the nature of sellers to want the highest price possible. However, we're seeing homes going to foreclosure this year that could have sold last year if the price was right. In markets where the trend is DOWN and depending on the need to sell, it pays sellers to price at or just below the average price of homes for sale in the immeidate area. Holding out for the top price this year has resulted in lower sold prices this year.

Consumers benefit when they know the facts.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-Mail

Posted by Lenn Harley, Real Estate Broker, Maryland & Virginia on 01/11/2008 12:54 PM

Comments (14)

maryland real estate, maryland homes for sale, foreclosures in maryland

This post has been included in Maryland Information

14 Comments on MARYLAND REAL ESTATE HOME PRICES - YEAR END REPORT AND TRENDS

JAN

2008

Lenn, this is excellent information for the consumer to be aware of. There are many real estate courses out there that teach agents to not use foreclosures and shortsales when conducting price analysis. Also, it's important to use the most recent relevant comparables versus picking and choosing from the previous 6 months to prevent chasing the market downward.

Amanda. It makes no sense to eliminate foreclosures when pricing properites. The appraisers use them. We have to.

Hi Lenn - "Consumers benefit when they know the facts." No truer words were ever spoken, that's for sure! Your last paragraph is a true nugget that all consumers should read and pay heed to.

Ann

Thanks Ann. You have no idea how many consumers I speak with who have had a home on the market for months with no showings. A quick check of SOLDS in their neighborhood tells me why. But, the time for them to be concerned was BEFORE they listed for too much money, not 6 months later.

Lenn:

Interesting mix of trends, but similar to ours. Sales down, DOM up, but varying trends in prices -some up (a few significantly), some stable, some down.

Jeff

JAN

2008

Lenn,

Typical trend we are going through here...no showings no calls in many months...if the price isn't adjusted then the market might not react. No reaction without any activity.

Great report. You put some time in this, and it shows!

Jeff. True. However, "median" prices is about all we hear about in the media. They're missing the "real" story.

Neal. We have a lot of sellers "chasing the pricing trend". They can't accept that the trend is down.

Renee. Thanks. Yes, I did. I appreciate the notice.

Lenn - Thank you for providing me with pertinent data. I can never seem to remember which site has all the sales data and how to extrapolate it. I try using matrix and keep coming up with the dreaded "over 500 entries".

Regarding the use of foreclosures when advising a seller about possible price points. I am some what conflicted. I agree that they do represent a portion of the competition. I also realize that the dire straits of one in foreclosure or "short sale" is not in the same position as those that are selling for other reasons.

The foreclosed properties should be noted, but their condition is also a factor. I have this thought that although the foreclosed properties will list and sell for less, they should not and will not impact the overall pricing of nearby properties to any great degree. When dealing with competition that is bank owned or in a short sale status....you must also consider the time and difficulty that may be involved in the purchase of those homes.

I suppose, I believe that the buyer will benefit from the discounted price. It is only one buyer per home. If the seller I am dealing with has a similar home, he will benefit from having me because when the foreclosed property is gone, I will advise him to consider the difference when viewing offers.

I may not have expressed this very well, but I do feel the impact of foreclosed properties and short sale properties is over stated by the media. Of course, there is nothing new about the media blowing things out of proportion.

Thanks John. Your comments are always welcomed.

First, consider the perspective from which I post and practice real estate brokerage. I represent buyers and therefore are posting information that I am hopeful is helpful to home buyers in making a decision to work with me or one of the agents in my network of experienced hard working agents

Secondly, I've been selling foreclosures for many, many years. At one time, under market conditions, I even had HUD approval. Don't any more because their homes are just not worth the money folks pay for them based on condition. However, I've had a number of buyer benefit from Va foreclosures, bank foreclosures over the years. With respect to condition, I'm always mindful of the 203k loan and similar conventional loans. So, condition is not always paramount when helping a buyer find a home that suits their needs. In today's market, there are luxury homes offered for sale that are bank owned, in excellent condition and offer a good opportunity for buyers.

Thirdly, what I'm observing in the markets in my area, which covers all of Northern Virginia and most of Maryland, foreclosure listings are 30% or more lower on average than all listings.

The problem is that the public and so many listing agents are holding out, holding on to, holding up prices to a point that the volume of sales is bordering on 30-40% of a viable market.

There was a time when I would tell a buyer "We'll be glad to show you foreclosures. However, keep in mind that any price discount from market is for condition."

Today, I have to say, "We'll be glad to show you foreclosures. In today's market, they are often the best buy and many are in move in condition."

It's not the homes that dictate the prices, it's the sellers. Until the market gets to a competitive range, I'm taking advantage of the news and looking for foreclosure buyers for my network of agents.

Lenn, this is fabulous. I'm wondering when, in our little enclave, the foreclosures will REALLY impact the market. In Denver-late '80's- they controlled the market; here in NY, second homeowners (vacation area) can rent until the market clears up. Nonetheless, they are hitting- it's that "pesky" move up buyer that is TRAPPED unless they "get it". A very tough situation for some sellers, lacking buyers. I repeat- this post is fabulous- gets everyone thinking. Thank you.

Laurie.

Thanks very much.

I'm going to keep beating this drum for anyone who will read it. I looked at some figures today and the difference between foreclosure listings and others in Montgomery County is about 40%.

Home owners can keep holding out. They're already chasing the market down. They cannot win. Once prices got out of the average buyer's qualifying range, it was all over.

Lenn - interesting information. I have wondered the appraisers are treating the foreclosures and short sales in New Hampshire. I am planning to have lunch with one of my appraiser colleagues to get a handle on the market and the trends that she sees in the marketplace. Thanks for your insights.

JAN

2008

Joan. I've spoken with several appraisers. One of the agents in my network is also an appraiser. Another broker partner's wife is an appraiser. She does not eliminate MLS foreclosure sales from comps.

When agents claim that "appraisers don't consider foreclosures", I believe they're just trying to raise the average prices in their CMA.

How can an apprsiser ignore recent sales on the block that happened to be a foreclosure? It's still a sale. They may note on their appraisal that it was a bank sale, but they can't ignore them. It DID happen. These may be owned by banks through foreclosures but they're still in the MLS. MLS listings SOLD are considered.

I don't believe that appraisers should use sheriff's tax sales, mortgage foreclosure auctions, etc. Although appraisers who go to the office of land records and examine transfers may take these into consideration. Not so much any more because the records are not timely.

Let me know what your appraiser friend says.

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