Are house prices really dropping? (Annapolis: appointed, sale, real estate market)

[myselfdotcom]

Housing is definately dropping in prices but Baltimore region is pretty stable if you asked me. The houses sit in the market longer then used be but the house price is pretty stable. DC, Baltimore regions has been always stable. You wont see a price value dropped 40% ..maybe 5-10% correction

[TuborgP]

Originally Posted by myselfdotcom

Housing is definately dropping in prices but Baltimore region is pretty stable if you asked me. The houses sit in the market longer then used be but the house price is pretty stable. DC, Baltimore regions has been always stable. You wont see a price value dropped 40% ..maybe 5-10% correction

There has not been necessarily been a large drop in asking price but are you sure that within neighborhoods there isn't a drop in the price houses have actually sold at. Nicer neighborhoods are hold up with their sale numbers best. That keeps the average price high because a higher percentage of those homes are selling even if at a lower price.

[AlicynD]

Overall, housing prices aren't decreasing in the Baltimore/Washington area; they just aren't increasing at a rapid rate. You can't expect to make 100K+ off of a house that you bought only two years ago, you hope to break even. You can't buy today and flip your house for 50K tomorrow. We are not in that type of market anymore. The "booming" housing market in the past few years made TODAYS market look "bad" to so many people, when really it's not. Houses are still selling, qualified buyers are still getting a great deal, and sellers (if they owned their property for a reasonable amount of time) are still making money. It's normal to NOT be able to flip your house in a years time and make a profit. It's normal for your house to take a few months to SELL.

New Construction....price decreases...eh maybe a little, but more like: you can get a lot more for a lot less in regards to inclusions. For that price you can now get a finished basement, the upgraded flooring, deck etc.

I'm not saying that no areas have seen a decrease in pricing and I'm not saying that no new construction prices have been slashed, but my statements are in an OVERALL basis.

[ChosenGSR]

Originally Posted by AlicynD

Overall, housing prices aren't decreasing in the Baltimore/Washington area; they just aren't increasing at a rapid rate. You can't expect to make 100K+ off of a house that you bought only two years ago, you hope to break even. You can't buy today and flip your house for 50K tomorrow. We are not in that type of market anymore. The "booming" housing market in the past few years made TODAYS market look "bad" to so many people, when really it's not. Houses are still selling, qualified buyers are still getting a great deal, and sellers (if they owned their property for a reasonable amount of time) are still making money. It's normal to NOT be able to flip your house in a years time and make a profit. It's normal for your house to take a few months to SELL.

New Construction....price decreases...eh maybe a little, but more like: you can get a lot more for a lot less in regards to inclusions. For that price you can now get a finished basement, the upgraded flooring, deck etc.

I'm not saying that no areas have seen a decrease in pricing and I'm not saying that no new construction prices have been slashed, but my statements are in an OVERALL basis.

I beg to differ, I've been following some properties in the Columbia/EC area and I definitely see prices falling on townhomes. A simple search of properties in a specific price range yields more options now than it did 6 months ago. Like people said before, if you're wishing to unload your place be prepared to cut the buyer a deal.

[TuborgP]

Originally Posted by ChosenGSR

I beg to differ, I've been following some properties in the Columbia/EC area and I definitely see prices falling on townhomes. A simple search of properties in a specific price range yields more options now than it did 6 months ago. Like people said before, if you're wishing to unload your place be prepared to cut the buyer a deal.

Not just town homes but single family also.

[AlicynD]

Pricing will certainly vary for each neighborhood. I am familiar with the Columbia/EC area, as I both live and work in the area. As someone said before, there are some neighborhoods that always retain its value and others that may vary with market conditions. Even so, we can't expect our properties to appreciate in a short time like they were before. Houses listed too high when they go on the market and then lowering pricing to actual market value can also be mistakenly seen as "falling prices".

I think one of the main problems is the main stream media has been making generalized statements, when really, each market, each city, each town, and each neighborhood are specific and different from one another.

[ChosenGSR]

Originally Posted by AlicynD

I think one of the main problems is the main stream media has been making generalized statements, when really, each market, each city, each town, and each neighborhood are specific and different from one another.

It's true in a way, but you cannot ignore the fact that real estate is just like any other investment, sometimes it's simply overpriced. Real estate went up too much too fast, things like price/rent ratios are there for a reason. At the end of the day supply/demand is still king. Lending standards will tighten more and more, ARMs will reset, and prices have no way but down until they settle into the trendlines of past performance.

Yes there are areas that will maintain prices, there are plenty of "rich" people to go around, but on average prices have no way but down at least for a while. That or they will simply stay stagnant and time will induce the "depreciation".

[burnt]

Originally Posted by pythagras

Yes.

Check out Zillow - Real Estate Valuations, Homes for Sale, Free Real Estate Information
Plug in the address of what you're looking at, it uses recent sales to compare. When I plug my house in, I see a drop of 10% of the homes value when compared to Jan 2007. The bottom might be this winter, but that really depends on how terrible foreclosures become and I imagine if the neighborhood you are looking has more or less foreclosures than average. Where we live, most people have owned there homes since before the housing boom with only a few buying in the last 5 years. I'd think that would help some, but I imagine neighborhoods with much newer homes or more sub-prime borrowers might be more at risk. And by "sub prime" I don't just mean poor folks, anyone is a sub prime borrower if they borrow outside their means, thus any neighborhood is at risk.

That's an interesting link. I plugged in my address, and it's actually "worth" $33,000 more than I paid for the place in January 2006.

[TeamBenya]

The sales prices according to the MLS do show slight dips in average sales prices in many counties, but not all of them. However, the inventory of available homes is 7-10x HIGHER than we have seen in the last 10-14 years.

Yes, homes are still selling, but sales figures for the metro area show the lowest volume of sales in over 10 years. So homes are selling at a slower rate than we have seen since the mid 90's!

Also, keep in mind that the sales price that the MLS uses does NOT factor in seller concessions or contributions that were made. So, if someone sells their home for $250,000, and they contribute $12,500 to closing costs, the adjusted sales price is really 5% lower, or $237,500. The MLS does not make that adjustment.

2-3 years ago, closing cost concessions were extremely rare, now they're fairly standard. If a 4-5% concession is "normal" that would be evidence to me that market deflation is being represented in more than just what the average sales price is.

[TuborgP]

Originally Posted by TeamBenya

The sales prices according to the MLS do show slight dips in average sales prices in many counties, but not all of them. However, the inventory of available homes is 7-10x HIGHER than we have seen in the last 10-14 years.

Yes, homes are still selling, but sales figures for the metro area show the lowest volume of sales in over 10 years. So homes are selling at a slower rate than we have seen since the mid 90's!

Also, keep in mind that the sales price that the MLS uses does NOT factor in seller concessions or contributions that were made. So, if someone sells their home for $250,000, and they contribute $12,500 to closing costs, the adjusted sales price is really 5% lower, or $237,500. The MLS does not make that adjustment.

2-3 years ago, closing cost concessions were extremely rare, now they're fairly standard. If a 4-5% concession is "normal" that would be evidence to me that market deflation is being represented in more than just what the average sales price is.

That is very accurate and also include the 20K that may have been spent to make the house more appealing then the neighbors. New carpet and new paint are standard needs along with deck repair. Wait I have heard of people putting on decks and having their basement finished in order to sell.