Monday Market Update for Frederick County – a look into the future

photo credit: sittered

We had a meeting last week with a notable Frederick County Appraiser, Wayne Six. He talked to us about his take on the current market conditions. He feels we are still a while away from any type of turn around. We have to have about eight to twelve months of a stable market before climbing out of the hole. A key thing about our market is, of course the inventory. He follows the inventory numbers religiously. He held up a chart very similar to the ones I have been sharing with you on previous market updates and similar to the one below.

Wayne feels our inventory number will continue to climb to about 2400 homes. I have to agree as we were close to this last year. We had a drop of inventory around the holidays and as I have predicted they would climb back up again once spring hit. You just can’t have that many homes and expect to sell them in a reasonable amount of time. I really believe sellers are starting to understand this too. They should only sell, if they are truly serious. With all the short sales and foreclosures riddling the landscape, it makes it hard for a not-so-serious seller to compete with the low prices.

Here’s picture of the inventory over the last couple years. Do you see a trend? I do, that’s why I still believe it will climb in the spring.

You can see the inventory numbers are cyclic, however the overall is continually climbing. You can see we lingered around 2300+ homes last year for most of summer.

Below are the Housing Statistics for the Month of February. This housing report is usually available around the 10th of every month from MRIS.

February 2008 Market Condition Report

One of the key numbers that sellers need to understand, the Average Sales Price as a percentage of Average Listing Price. The average list price is higher than last year 5.37% …Yipee, but wait the other number is about the same amount lower (89.28%) than last year. This is a case of “I need xxx dollars for my house” and getting below market value for the house and longer days on market. (HINT: Buyer’s don’t care what you want or need.) Homes are being listed too high. Some agents do this because the are afraid to tell the truth and essentially “buy” the listing. Listing too high causes the seller to play catch up with the market. Wayne Six says we have been depreciating about 1-1.5% a month on home values. But that all depends on the inventory…lower inventory numbers will yield a slower depreciation and of course a higher inventory will yield a higher depreciation. It really comes down to the absorption rate of the neighborhood. Sometimes you have to dig deeper than county numbers to see the real picture.

If you need someone to do that for your home, give me a call.

Frederick Housing Market Update

Todays update we will take a quick look at the inventory levels in Frederick County over the last six months.  The inventory is still up over last year at this time by almost 400 homes.  Interestingly, the number of Condos have decreased while everything else has continued to climb.  They have been seeing about 15 sales a month on average.  (Here my latest on the Condo market in Frederick County.)

Housing count by types

February has historically been the beginning of the Spring Market lately.  Last year I feel our Spring Market was in February and March and then dwindled off from there.  This year seems a little slower start in the activity than last year.  However, the activity is picking up.  There are homes that have picked up in scheduled showings and actually contracts are being written on homes now too.

Sellers continue to show your home in the best light as possible and Buyers talk to your lenders.  The changes in lending requirements have really shut down the 100% financing.  Chances are today you will need at least 5-10% as a down payment.  That’s why you really need to be talking to your lender.  If you need one I have a list of Preferred Lenders in Frederick that will gladly assist you.

Also if you need assistance finding the right home…you can call me.

Have a great day.

Lets talk about Absorption Rate in Frederick County

Ab-what?  Are we cleaning up a spill?  Or a paper towel commercial?  No.  But similar idea…

The absorption rate is the rate at which the current real estate inventory would be absorbed by the current buying trends, if no more homes came on the market.  (don’t try looking this definition up…this is the way I translate it.)   Most real estate glossaries define it as follows;

Absorption Rate = Total Active homes divide by last months solds

The problem I see with using only last month, if it was historically a slow month then you think you have a high absorption rate.  I prefer to looked at an average of the last six months.  I feel that gives you a better idea of the real absorption rate.  Why?  The last six month will have some peaks and valleys that will be flattened out and give a much more stable number.  Sure, you can do a whole year but might miss a current trend indicator that might be on a climb or decrease.   An indicator of the market is the amount of months on the market on what type of market you are in.

Less than six months = Sellers Market ( High prices, low inventory, shorter days on market, less contingent contracts)

Six Months = Normal market.

More than six months = Buyers Market (Lower prices, high inventory, longer days on market, seller concessions, contingent contracts)

Below you have a table of the latest absorption rates of some of the areas in Frederick County.  To put it into perspective, I have also added adjoining county averages.  First blush looks like homes closer to the Washington DC area are moving fast than further out.

Market update in and around Frederick County 2/4/08

Clearly we are in a Buyer’s Market.  The Adamstown and Point of Rocks area are experiencing a much better market than the rest of the area.

If you don’t see your town above, send me an email and I will send you one.  (it has to be in Maryland…that license thing restricts me from going elsewhere)

You get your weekly market updates for Frederick County here

If you have been following Focus On Frederick for any amount of time, you know that you can get your local market conditions updates here. Today, the Frederick News Post ran an article “More pulling homes off the Market to Rent.” You shouldn’t be surprised about the information, because it’s something that we talk about it here on a weekly basis.

Buzz Mackintosh, of Mackintosh Inc. Realtors, said some people are pulling their homes off the market.

“They are renting or will come back in the spring,” he said. ~ FNP Jan 29th

On Here…

I will say that the holidays have helped lower the inventory just a little, but I imagine that all the sellers that pulled out late this fall will try it again in the Spring. ~ FOF Dec 31st

And then we also talked about the inventory conditions in Frederick County…

“Until the buyers come out, prices will go down and the inventory up,” Wayne Six said. “It is supply and demand.” ~ FNP Jan 29th

On here…

~ FOF Aug 7th 2007

You can see all of the past market conditions by clicking the drop down box for categories or just follow this link to Frederick County Market Conditions.

You heard it here first.

Have a great day.

« Previous Page — Next Page »