The Appraisal Factor (X-FACTOR) that may derail the recovery?

Real Estate Broker/Owner with Maxus Realty Group - Broker 301-246-0001 Broker - Realtor - CEO

Urbana MD Real Estate Market Report

The Appraisal Factor  (X-FACTOR) that may derail the recovery?

For a long time the so called experts in the real estate market have been predicting an extremely long rebound in the housing market in areas like Urbana Maryland in Frederick County because of the "Shadow Inventory" looming behind the scenes.
This predicted new wave of new inventory was supposed to crush the housing market in Maryland and slow down any momentum that was generated by the Spring and Summer markets of 2011, 2012. To my surprise after seeing the numbers year to year for August 2011 to 2012 . .

"I think the shadow inventory is not really the cause but our market specifically  in Urbana is really sucking right about now!"

The shadow inventory has not materialized  yet there is another factor that is stopping the growth besides the sluggish local economy . The X Factor here may be the appraisals. Appraisals are coming low and killing deals all over Maryland right now. In newer communities like the Villages of Urbana, this is significant because of the time in between sales. In an older neighborhood, someone selling a home 20 years later does not have problems adjusting the final sales price to the appraised value. 

The good news is that we should be looking to a healthy 2013 after we get over this hump.
The market itself will pressure the appraisals to raise prices, together with the decline of short sales and foreclosures in the area. The evidence of this is already showing in many places in Maryland. 

Looking at the cart below, the most significant number is the "Median Sold Price" being 26.48 % LOWER compared to last year.
This affects home prices across the board and one of the reasons why appraisals are coming low.

The average Sold in 2011 was $482,890
The average Sold in 2012 is $355,000

Big difference!

According to the chart below, we have definitely started to see a measurable down trend but do not panic yet. . 
Days on the market is down from 77 to 51, meaning more buyers out there.
Also, the actual average SOLD price is only down 9.71%, a good sign.

In 2013, interest rates will most likely still be at record lows pushing renters in purchasing homes all over Frederick County. ..  in cities such as Urbana Maryland this will push prices higher.

New Villages of Urbana Listings: All Urbana homes, townhouses  and condos listed within the last 7-days
Expand your search and obtain absolutely the latest listings here

Are you a selling in Urbana?  we do understand where you stand. . .unless you really, really need to sell, we are advising our clients to wait until 2013 . .but just in case you need help now


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David Grbich
Realty One Group - - San Juan Capistrano, CA
Orange County Real Estate - 949-500-0484

Hard to believe that sold prices in this market have not increased like they have in most other markets across the country. Appraisers may have a hand in the sales prices as their values are based on past sales with little acknowledgement for upward price trends. Regards Dave

Sep 13, 2012 02:36 AM #1
Beth and Richard Witt
Long Island Cash Home Buyer - Huntington, NY
Long Island Cash Home Buyer 516-330-6940

"I think the shadow inventory is not really the cause but our market specifically  in Urbana is really sucking right about now!"

I just love your verbage...  Let's just do what we can to get through this S____ Storm...

Sep 13, 2012 06:45 AM #2
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Fernando Herboso - Broker for Maxus Realty Group

301-246-0001 Serving Maryland, DC and Northern VA
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