Median Home Prices in Frederick County...What do They Tell Us?
According to NAR (National Association of Realtors) third quarter data shows that in 28 metropolitan areas, median single-family home prices increased from the same quarter in 2007. Four metro areas were unchanged, and 120 areas showed declining home values. Our area was in the latter group, alas.
Distressed property sales, meaning foreclosures (REO's) and short sales accounted for 35 to 40% of the homes sold in the third quarter. This statistic was echoed here in the Frederick real estate market. We saw the median sold price move from $287,000 in October 2007 to $234,500 in October 2008, a decline of 18%. In all of Frederick County, 170 homes were sold last month, a decrease of 10%, but almost 400 new listings were added to the inventory. Many of them foreclosures and short sales.
What we are seeing is that the numbers are skewed a little by the distressed property sales. Generally, they sell for less than market value, because they usually need some work. But they still have an impact on what we consider market value; a negative impact. They continually pull down on the market values until either one of two things happen: We see a diminishing number of distressed properties (which doesn't seem promising any time soon) or, until they establish a low point themselves. I suspect that the low point is here, because, like I have said in previous posts, we're seeing multiple offers on REO properties. Multiple offers are competition. Competition is a good sign.
Still, we don't think we'll see any appreciation for a while, maybe a couple of years. But we are seeing a leveling off, which is the beginning of the end, not the end of the beginning.
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The Highland Group
Chris & Karen Highland * 301-831-9947
Turning Point Real Estate – 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119
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