Maryland Housing Trends Report Released | Part 1
February 4th, 2008 Categories: Market Statistics
This morning I received the sixth issue of the Maryland Trends in Housing report written by MRIS and Delta Associates. This report provides an in-depth look at the issues that shape the Mid-Atlantic housing Market.
The Housing Trends Report includes an analysis of the following key topics:
- An analysis of the Washington and Baltimore economy
- An exploration of housing data, including Residential Real Estate
- An overview of the Commercial Real Estate market
- A special section regarding Foreclosures in the real estate market
- A special section including information about BRAC. (Base Realignment and Closure). See my BRAC Information Page.
In this post I will summarize the analysis of the economy as well as the findings on the real estate market. (Washington/Baltimore Area)
In part two of this series I will summarize the two special sections including the foreclosures and the effects of BRAC to our area. Later this week I will begin my monthly real estate market reports for individual counties and key cities.
The Economic Outlook of the Baltimore Region.
A key factor effecting our real estate market is the local economy. The Housing Trends Report indicates that the economic conditions in the Baltimore area were stable in 2007. Key factors supporting this claim are:
- Unemployment Rate for 11/07 was 3.6%, Down from 4% of November 2006.
- Job Growth is strong, with Health, Education, and Government being the largest growing sectors.
The chart below illustrates the core industries that support our local market:
Economic Outlook of the Baltimore Area
Projections for the Baltimore area economy state the area will continue to expand at a moderate pace during the balance of the decade. Job growth is anticipated to continually increase through 2009 with the Education/Health/Government sectors leading the charge. The financial services sector is also expected to grow at a healthy pace.
The Regional Real Estate Housing Market Trends
In the first three quarters of 2007 home sales posted slower than usual numbers. This declining trend was sharper in the final quarter. Contributing factors to this trend include:
- The “National Credit Crunch” that began this summer
- High gasoline prices
- A decline in Consumer Confidence
- Opinion: Yet to be factored in is the dramatic increas in Maryland Taxes.
Some Interesting Charts to illustrate the Real Estate Market in Maryland can be seen here:
The Good News: While the number of sales declined (sales volume), Home Prices Have Remained Stable in most Sub-Markets. This is something we will explore in my forthcoming articles where I analyze particular counties and cities. In the meantime, let’s look at the regional results:
- Average metro wide prices in the 4th quarter were flat following a rise of 4% in the summer.
- December home prices were .4% higher than in December 2006.
- Much of the region, especially those closer to the metro area’s, have been spared from falling home prices. Areas further away have not enjoyed the same protection.
Regional Market Trends in Housing for Home Buyers and Home Sellers
The table below illustrates the current state of the real estate market for both home buyers and home sellers. Keep in mind these are regional market trends and that you should consult your Realtor® when selling or buying to dig deeper into the County, Zip Code, and Neighborhood that you are selling or buying in.
New Homes in Maryland
Supply still outstrips demand across the region and our builders are feeling the effects. Eager to sell their inventory we are seeing price cuts, and increased incentives. Some builders are streamlining their inventory management, simplifying their custom finishes available, and revising their costs and expenditures. With buyers in the driver seat and waiting on the sidelines for “the bottom” home builders could bare the brunt of the declining market. Overall, the region remains “over-supplied” with new construction.
This means, it’s a great time to buy a new home! Never get into a real estate contract with proper representation, call me first!
Summary and Forecast for the Maryland Regional Real Estate Market:
The bottom line for our market is that we are doing well considering the national averages and what you see and read. The housing report indicates a healthy demand for housing, supported by sturdy job growth, positive net migration, and a decline in existing home listings and new construction. This should stabilize pricing and lead to an increase in sales activity. They expect that conditions will improve first in communities closer to the metro center where jobs are located by late year or early 2009.
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