Maryland Housing Statistics November 2008
I know its been a while since the last posted, but I figured it would be nice to update anybody who still has an RSS feed to my site with the November 2008 Housing Statistics. The most shocking statistics, in my opinion, is the Months of Supply which begins on page 37 of 45. Enjoy and please leave a comment with your thoughts if you read this posting.
Maryland Housing Statistics November 2008
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10 comments:
Kevin, it's great to hear from you again. Thanks for those latest stats. It made me feel queasy. Sales are way down, yet average and median prices are still high while inventory is soaring. It appears that high-priced homes are selling more than lower-priced, so the rich are doing just fine while the middle-class like me are still screwed.
When is this market going to face reality?
Meanwhile I'm moving next week to another apartment. If you remember the Rodgers Forge Apartments mess, here's a brief recap and update.
* OCTOBER 2005: Wallace Campbell & Co sold to Triton Real Estate Partners in (unable to find pricetag)
* Triton decides to go condo, evicts many long term residents (incl. many elderly), destroying a nice diverse community. Renovations were in phases; my block was in a later phase so i was spared.
* MAY 2007: CBRE Realty Finance foreclosed on property. Triton in big trouble, not just for Rodgers Forge, but other business expense connected to condo conversion.
* JANUARY 2008. CBRE Realty Finance sold Rodgers Forge apartment complex to PMC Group Inc. , Philadelphia. They decided to renovate, to create luxury apartments. My block has to be vacated by Jan/Feb '09. I'm moving into one of the renovated units next week. My 2 bedrm rent has gone from $785 (gas and water included) to $1100 (includes only water).
More info:
http://www.bizjournals.com/baltimore/stories/2008/01/28/daily23.html?ana=from_rss
http://baltimore.bizjournals.com/baltimore/stories/2008/03/17/story9.html
http://washington.bizjournals.com/baltimore/stories/2008/08/11/story6.html?q=rodgers%20forge%20triton
Thanks, Kevin. Hope you have time to provide occasional updates in the future.
cheers,
shireen
Hi Shireen,
Good to hear from you too. Median and average prices are generally between 2004 and 2005 prices depending on county and in some cases below 2004 prices. One has to remember that prices are "sticky" and it takes time to revert to mean. Unfortunately I believe all the job loses and coming job losses will take care of the stickiness. Additionally, prices in certain neighborhoods have in some cases held flat, while in other cases are down 50% already. I know of a few neighborhoods north on Park Heights Ave. in Baltimore County were prices are off around 50% now. I would take a gander to say this is a result of the financial jobs lost since this area of Baltimore County is an enclave for rich financial types. Head about 5 driving minutes east over to Mays Chapel and look at the condo building where I live, prices are off about 29%. The average new purchase price of a condo in my building was $380K just a few years ago and now there are short sales for $270K in the same building. Asking prices for the Baltimore/Towson MSA are off about 30-35% from peak back in June 2006 according to www.housingtracker.net.
Another interesting statistic is the "months of supply" that I mentioned in my post since this show at the current sales pace and current inventory levels, it would take X months to sellout. A normal market would see months of supply around 5-6 months, while we currently are seeing well over 15 months in my counties. This shows the supply and demand impact and is causing prices to fall. We have come a long way from two years ago, but its unfortunate that my predictions were correct regarding the general economy. My gut always told me we were setting the stage for another depression and now I fear the house of cards is crashing to this point. The most concern point of this whole crisis are job loses. If somebody loses their job in this economy, I can't imagine finding another. Unfortunately, I might be in this predicament soon as I know my company is soon going to bring the hatchet and join the 100's of other Baltimore companies cutting jobs. This year there are no presents under the tree at my house. My wife and I have also been relying on our fireplace to heat our condo instead of turning on the heater to save money. It is not that we don't have money at the moment, but we realize this may not be the case next month or even next week and we are trying to embrace frugality before it embraces us. On the upside, if we both keep our jobs, we will have saved a lot of extra money. And if your wondering where I am keeping my money these days, its all in cash equivalents at my bank entirely out of the stock market. I didn't lose a dime from the market crash. Actually I've been making money by playing the occasional short play with double leverage proshare ETF's. I also do not have any intentions of going long the market anytime soon and I would recommend readers not to get cute and think that this is bottom. If this is only a recession, then we wont recover until summer/fall of 2010 and if this is a depression we wont recover until 2015. Prepare accordingly and borrow a motto that I borrowed from Mish Shedlock, "Embrace frugality or it will embrace you." The future will not be cool to have BMW's or big houses, but how low you can get your fixed and variable costs.
I must be clairvoyent; I haven't clicked the link for your site since October. I just shake my head looking at these numbers and trends. We can only be headed for much worse times. It will be quite a life lesson. Keep your powder dry.
I understand if you guys are not going to keep the blog running full time, but I certainly do hope you continue to post these monthly statistics. I have seen a couple enticing price drops in foreclosures, but these numbers stick out like a sore thumb and remind me where the trend is going. This is a great service. Where do you pull your data from?
Shireen,
I would go in and bargain it down at least $100 a month. If you are a renter already in the complex with good credit it is cheaper to keep you. The "man" has no leverage anymore its all about survival at this point. I just recommended a coworker move in to that apartment complex and he was wowed. After some wheeling and dealing he got a 2 bedroom quote down to $975 with his military discount. He walked around and it's obvious that the place is not full and the reality is that they are in tough spot being at the higher end of the market. There are way too many homes for rent and empty apartments and condos in the Towson area that doing a 24month lease might be worth it if you are staying put.
The situation with the State Government coming out today and saying the budget deficit has DOUBLED from just 2 months ago to around $900million mean that extremely draconian cuts are about to happen that will be another legdown the housing market. Other than the Ruxton neighborhood, the rest of Towson is made up of many folks who are institutional or nonprofit employees and financial services.
Financial services was the killer this year and will be laying folks off at least until the end of 2010.
The non-profits and institutional are a year behind the economy in most cases so they will get hit next year.
The University will be laying off staff, professors, and executives in the meantime raising tuition. (I'm still expecting the college bubble to burst out of all of this as loans get tougher to get and the new social reality that debt is bad)
These are 100k jobs that are hard to replace with all states and private institutions struggling from investment losses in the endowments.
Many of the students at Goucher and Towson are from NY/NJ whose parents are employed in.....financial services. I have heard already of some students that dropped out and moved back home to go to community college because both mom and dad lost jobs this fall in NY/NJ.
Baltimore County is likely also going to be doing layoffs and forced baby boomer retirement to get salaries down which again causes houses to come on the market.
As for home prices in Towson, the only homes selling now are foreclosures or homes that are for sale by baby boomers that are needing $ to retire and are at 2005 prices. The volume is crazy low as people keep pulling homes off the market after getting unacceptable contracts that do not allow them to "move up".
Renovation money is gone because banks are no longer doing HELOC's. We are in a historic place as banks never had these HELOC's stress tested before. The days of the LTV to 80%-100% are over. HELOC's and seconds may disappear for years(Chase and BOA will only do a HELOC today at 50% LTV) or potentially forever.
The reality today is you really need 10% down at a minimum which in Towson is going to be 30-45k. (Everyone raise your hand if everyone you know in your social circle renting has this much CASH on hand with no debt) This will require a PMI payment which has gone up BIG time because of all the losses that it no makes more sense to just wait for the price to fall and save more till you get to 20%. Prices will come down; they have to as the easy money is gone forever that even 3% interest rates will not help.
As for the fed coming down to 0% interest rates this is uncharted territory. Unintended consequences are going to come out of this.
Till the stock market recovers to above the 14000 level of fall 07, the housing market will not flatten. Even then it will need to get up to 18000 to jump start housing. This is a very good barometer as this means asset prices are going up and buying a house makes sense. Till then if you have stable rent then renting will make sense.
Not to scare people but just today arguments came out that homes may take DECADES to recover. http://tinyurl.com/5fjt38
Great charts as always. Glad to see you keeping the faith.
Happy to see you posting again! Since you signed off in October 08 I hadn't visited this site again ... and today only accidentally clicked on the URL and was delighted to see your update.
Here in Montgomery County, where every other car you see on the road has government plates, housing prices remain very sticky. Many are being removed from the market after a price reduction or two fails to move the property. Still see many, many townhouses in my area being offered at lists double their 2000-2004 prices. I have cash for a 20% dp but for now ... and still the 'Happy Renter.'
dude
you rock, those charts from the eastern shore
were amazing. 150 months of supply?
OMFG, you might as well give them away
Thanks for the charted data. Truly amazing trends. I am so happy I didn't buy in Fall of 2004 when I was quite close to doing so.
Where do you get all the data for the charts?
http://www.mris.com/reports/stats/
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