May 2009

What Does This Mean?

Unfortunately, prices have fallen from where they were 12 months ago.  A quick look at the sales statistics from April shows us some promising information, however:

April 2009

The average home sales price for April 2009 was $267,170.  In may, that number was $281,235, or an increase of just over 5% in sales price!  Not only that, but there were 86 homes sold in April, and 119 homes sold in May.  That’s a 28% increase in home sales over the last month!

So we know that home sales are up, sales prices are starting to rise, but why is the market starting to look a little brighter?  Well, part of it is that prices and affordability are enticing more buyers.  That, along with 45 year lows on interest rates, as well as the $8,000 new home tax incentive, means that first time buyers are seeing value in the soft market.

It’s too early to say turnaround, but home sellers are seeing some encouraging information here!  Let’s hope that this is the start of a broader economic recovery!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 – office
301-653-8116 – cell

Charles County Real Estate Blog
SOMD Home Search
Southern Maryland Custom Homes & Land

    I know what you’re thinking: if rates are rising and pending sales have fallen, what the heck is the good news, right?  well, there’s a few early indicators here that might just be good news for struggling sellers! 

Sales Volume

    First off, Sales are up.  Not by much, but we are seeing a few more sales each month, and that number is slowly (VERY SLOWLY) rising, but it’s going up none the less, which is a start.

Inventory

    Second, the number of available home has stopped rising over the last 3 months.  It’s even (Dare I say it?) Dropping.  This is important because it shows that the skyrocketing supply of available homes has started to drop.  Remember real estate is all about supply and demand, and right now we need to see that supply drop!

Prices

    Prices and Values are a bit of mixed nuts right now.  The average sold price rose to $330k, while the median fell to $300k.  Oddities like this are to be expected while drastic market shifts are happening.  The long and short of it is that homes under $300k are moving the most, but the stagnation we’ve seen in the $400k+ range is finally starting to move a bit.  This means the average sales price trends higher even though cheaper homes are selling faster.

Time On Market

    Also, note the the average time on market (DOM) jumped above 140.  When you look at this in relation to the volume of available properties, it tells us that fewer and fewer people are putting their homes up for sale, and that more people may be willing to wait the market out.

Summary

    I’m not ready to start shouting that the market has recovered; we’ve still got a long road ahead of us.  It’s signs like this that may indicate slowly improving conditions, if this is just a blip, we’ll see numbers fall along with the interest rate hikes and coming fall sales market.  Stay tuned!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St.
La Plata, MD 20646
301-653-8116
301-609-9000
http://www.teambenya.com

What’s Happened:

    For the first time in 7 months, home sales in Charles County, MD have actually seen some growth!  Earlier this year we were looking at home sales in the range of 50-60 units per month, and now that number is closer to 100!

    Pending Settlements, the number of homes currently under contract, have gone up as well, so there is a bit of bright news in the market this month.  We’ve also seen the number of homes available on the market level off as well, so now we’ll have to wait and see if the trend continues.

    Between February and March we have also seen that the average price of a home in Charles County (roughly $312,000) didn’t fall, the average number of days on market (158 days) has leveled off as well, due partially to the increased amount of home buyers we have seen in the last month.

What Does This Mean?

    It’s great that we’re seeing potentially positive changes happening in the market.  It’s a little premature to say that we’re going to see prices rise again in the near future, but at least we are not seeing the values continue to fall. 

    Foreclosures
are having a big impact on the market right now, and they make up a
significant portion of sales, and unfortunately those
properties are what traditional sellers are forced to compete with.  The good news to it is that the amount of transactions taking place each month is growing!

     Home owners who are trying to sell should be seeing increased traffic through their homes, provided they are priced right and marketed well.  I’ve noticed an increased amount of traffic through my listed homes right now, and it’s a big relief to my clients to see that the market might be trying to stabilize.

    For buyers, sitting on the fence has been forcing down
prices, and we’re starting to see some good deals emerge, which in turn has caused the local market to drop price-wise, and it seems that prices are stable, and we’re starting to see more buyers take advantage of both the lower prices and the preferable interest rates that are available.

    If you would like more information about the Charles
County Market, Foreclosures, Listings, or New Construction
Developments, please ask!  I have a wealth of local information and
resources and I’m always willing to assist people in navigating this
tricky market!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

     It’s slow, but I’m happy to say that we are seeing movement in the real estate market here again!  Typically mid-March to the end of June is the busiest time of year for real estate sales, so it’s great to see the shift towards an increase in sales.

     We’ve seen an increase in not only the number of sales in February, but also the number of pending settlements, as well as the number of listings.

     It’s not all roses, however.  Homeowners are still finding it difficult to sell their home in this market, and the average time on market for a home these days is now up to 160 days, up from 147 a month prior.  The average sales price has held steady, and the median sales price is even up a bit, but it’s not a good indication that home values are rising at this time.

     This sort of market is the very definition of a buyers market.  Interest rates right now are near 5.8%, and home values are correcting very quickly.  Personally speaking, I’ve seen a dramatic increase in the number of people looking to cash in on the market, and the number of buyers has greatly increased in the last 30 days.

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

What’s Good:

    The number of active, available homes on the market has fallen again.  As fewer and fewer homes are listed
for sale, the difficulty in selling should (at least in theory) ease.  June of last year saw over 1,100 active listings, while in
December that number was closer to 950.  There’s a couple of reasons
for this. 

    First, many people don’t like to deal with the hassle of trying
to sell their home in the middle of winter.  Holiday stress is high
enough without having to worry about people showing up at all hours of
the day to tour your home.  I expect that the number to climb again as
the spring approaches, and you can see that historically, the number of
active listings always falls during the holiday season.

    The second reason is that a number of homeowners have decided to
rent their home rather than sell it, so as homes are rented out they
are no longer listed for sale.  Creative moves like this are becoming a
serious option to more and more people these days.

    The average sales price of a home in Calvert County did manage to rise again this month, but buyers continue to sit on the fence and sellers get more anxious, and with sales and pending settlements at a 10 year low, I don’t see this as indicative of a market improvement, but rather it is skewed by a few sales of select large homes.

What’s Bad:

    Sales rates have continued to fall, as
have the number of pending settlements.  This figure is particularly
disheartening to sellers right now because it underlines the difficulty
the are currently experiencing.  Traditionally sales tend to pick up
once winter ends and I know quite a few sellers who are anxious to see the cold weather snap and the rate of sales rise.

    The average number of days on market has jumped again.  at over
175 days, this is the highest Charles County has seen in 7 years.
While this should not be a surprise, it does not look like it is going
to change anytime soon, and I would anticipate that this will continue
to climb while the market deflates.

Wrap Up:

    The Housing Slump continues to place pressure on the local Southern Maryland real estate marketplaces.  Foreclosures
are also continuing to rise with many lenders anticipating an increase
in foreclosure this year over 2007.  Lending criteria is also
continuing to creep upwards while interest rates have managed to hit a
2-year low this past week.  Be sure to check back every month to see
the latest analysis of what’s going on in your back yard!

~Jonathan Benya

Century 21 New Millennium

Waldorf and Southern Maryland Real Estate for Sale

Southern Maryland Real Estate Blog

What’s Good:

    The number of active, available homes on the market has fallen for the third consecutive month.  As fewer and fewer homes are listed for sale, the difficulty in selling should (at least in theory) ease.  September of last year saw over 1,750 active listings, while in December that number was closer to 1,500.  There’s a couple of reasons for this. 

    First, many people don’t like to deal with the hassle of trying to sell their home in the middle of winter.  Holiday stress is high enough without having to worry about people showing up at all hours of the day to tour your home.  I expect that the number to climb again as the spring approaches, and you can see that historically, the number of active listings always falls during the holiday season.

    The second reason is that a number of homeowners have decided to rent their home rather than sell it, so as homes are rented out they are no longer listed for sale.  Creative moves like this are becoming a serious option to more and more people these days.

What’s Bad:

    Sales rates have remained stagnant for the last four months, as have the number of pending settlements.  This figure is particularly disheartening to sellers right now because it underlines the difficulty the are currently experiencing.  Traditionally sales tend to pick up once winter ends and I know quite a few sellers who are anxious to see the cold weather snap and the rate of sales rise.

    The average number of days on market has jumped again.  at over 150 days, this is the highest Charles County has seen in over 8 years.  While this should not be a surprise, it does not look like it is going to change anytime soon, and I would anticipate that this will continue to climb while the market deflates.

    The average sales price of a home has fallen once again.  We’re currently looking at a 12% drop in value since July 2007, and I would expect this number to continue to fall as buyers continue to sit on the fence and sellers get more anxious.

Wrap Up:

    The Housing Slump continues to place pressure on the local Southern Maryland real estate marketplaces.  Foreclosures are also continuing to rise with many lenders anticipating an increase in foreclosure this year over 2007.  Lending criteria is also continuing to creep upwards while interest rates have managed to hit a 2-year low this past week.  Be sure to check back every month to see the latest analysis of what’s going on in your back yard!

~Jonathan Benya

Century 21 New Millennium

Waldorf and Southern Maryland Real Estate for Sale

Southern Maryland Real Estate Blog

Looking Back

    Currently, Prince George’s County Sales Statistics show that homes sales are down a little over 55% from where it was a year ago (934 homes sold 11/06 vs 418 homes sold 11/07).  The average time that a homes is on the market is up almost 75% (59 days 11/06 vs 103 days 11/07).

    Home owners in Prince George’s County are seeing less return for their money as well.  in 11/06 home owners saw an average return of 97.2% on their asking price, that figure now is roughly 93.2%.  Bear in mind that this figure does not include any seller concessions that were made, which has risen as well.

    Price wise, the average sold price has fallen 8.81%, from $344,956 to $314,577.

Why The Drop?

    P.G. County is a hotbed for overpriced and foreclosed homes right now, and mortgage companies such as Countrywide and Freddie Mac are anticipating the volume of foreclosure to increase through 2008.  This is combined with the fact that as mortgage rates have fallen, the criteria for approval has increased.  Lenders are requiring higher credit scores and more money down up front in order to approve loan applications, making it more difficult for people to purchase.

Will it Continue?

    P.G. County has the highest level of foreclosure in the state, thanks in part to multiple mortgage scams that operated in the region, as well as people who got trapped purchasing sub-prime loans that they can’t afford to pay back.  Until the volume of foreclosures fall, it is difficult to anticipate an increase in home prices in the area.

Prince George’s County Current Foreclosures (319!)

Related Article:

Understanding the Housing Slump in Maryland

County Update

    In 2006, we saw a total of 19 foreclosures sold through Realtors.  In 2007, that number has jumped to 61.  The reason is two-fold.  First, because there is so little equity involved in foreclosures (due to purchases made at the height of the market with sub-prime loans), Banks are forced to sell their properties through brokerages to minimize their financial losses rather than through foreclosure auctions, which previously had been the easiest method to unload bank owned homes.

    Currently, there are 51 bank-owned properties available for sale in the County, up 10% from last month, and that number is expected to climb as more people are hit with mortgage rate adjustments.

Waldorf Statistics

    Waldorf alone has 29 Pre-Foreclosure Properties right now according to Realty-Trac, 169 Properties available for auction (most of these will end up available through real estate brokers due to the high debt ratios), and 34 bank-owned properties.

Is There Relief?

    Maryland in particular is being devastated by this trend.  We’re currently listed as 15th in the nation for foreclosures, up from 40th a year ago (a 370% increase).  A task force was established by Governor O’Malley back in June, but so far, there has been nothing but increases in the number of local foreclosures.

    Part of the problem is the rise is mortgage fraud, over 400 homes were involved in the Metropolitan Money Store Scam, and over 1,000 were wrapped up in the Metro Dream Homes scandal.

    Another thing to bear in mind is the new sub-prime rate freeze announced recently.  The scope of the freeze is extremely limited however, and it is not the "rescue" that many people were hoping for.

Future Forecast

    This is not a concern that is simply going to correct itself with the next six months, or even the next year.  Home prices are expected to continue to fall, and county sales statistics are evident of the need for the market to deflate further over the next year.  It is likely to take at least 18-24 months before the market and home values in the are begin to see any sort of healthy increase in value.

~Jonathan Benya

Century 21 New Millennium

Team Benya

301-653-8116

Website

Blogsite

    Prices are down roughly 3% from November of 2006, and will continue to fall so long as we see supply exceeding demand.  117 homes were sold last month, out of almost 1600 for sale.  This is typical of the entire region, where supply exceeds demand by at least 12 months.

    Also typical of the region is the fact that there are 288 new listings taken this month.  It seems that there are twice as many listings taken as there are sales closed in each county, and that only contributes to furthered market deflation. 

    Another factor to look at is the average sales price vs. the average listing price.  Last year that figure was at almost 98%, while this month the county-wide figure is at 94.6% (Our personal numbers are still above 95%, thanks to some tough negotiating on behalf of our clients).

    Conventional financing is the most popular method of finance right now, although there were 10 mortgage assumptions last month, indicating a possible resurgence in this method of finance transfer.

Charles County Statistic Chart   

~Jonathan Benya
Century 21 New Millennium
Team Benya
301-653-8116
Website

Blogsite

    The best indicator of how the market is doing is by looking at how many days a home is on the market (on average).  In Saint Mary’s County, that time on market has risen 38%, from 92 days to 127 days over the last 12 months.  The average listing price for a home has gone up 3% in the last year, but average sales prices are up less than 1%, so it is difficult for homeowners to reach their desired selling price.

    When you’re looking at the average listing price versus average sales price, homeowners are typically seeing 93.85% of their asking price, which is almost 2% less than last year; a clear indication of a buyers market(currently, our list to sales ratio is still running over 95%, better than the local average).

    Currently, there are 942 active and available listings in the county, and 62 sold in the last month.  There are 126 new listings within the last month.  This equates to a severe overstock in available homes (15 months worth), and with more homes being listed than sold each month, that number is expected to continue to rise.

    On final item of note is that conventional financing was by far
the most common method of finance.  Although this is not unusual, it is
indicative of the popularity of conventional financing rather that FHA
or VA loans.

    If you have any questions about this
information or would like more detail on the current state of the local
real estate market, please give me a call or drop me an email!  I’m
always happy to help provide sales information and advice.

Saint Mary’s County Statistics Chart
 

~Jonathan Benya
Century 21 New Millennium
Team Benya
301-653-8116
Website
Blogsite