Charles County Real Estate Market Report – November 2007

Wow, this has been an incredibly difficult year to try selling a home!  As I’ve mentioned in previous blogs, Countrywide Home Loans was the first to take action to help ease consumer strain and keep people from being foreclosed on.  It may be to early to tell, but it looks like we’re starting to see signs of stabilization in the local market, hopefully other lenders will contribute further and help ensure market stability.

What Looks Good:
The average number of days on market (DOM) in Charles County, MD has actually declined!  DOM actually fell from 118 days to 115 days.  This doesn’t mean that houses are moving any better on the marketplace, however, simply that the average time on market until it is sold/rented/withdrawn has been reduced.

The number of homes available for sale on the market in Charles County, MD has gone down!  Traditionally the coming of the holiday season means a gross reduction in the number of people who are trying to sell as well as looking to buy.  Often times shopping for a home around Christmas means that there is a strong potential to get a better deal, but moving when there is snow on the ground is difficult and inconvenient, so many people opt to wait for better weather.

Number of sales for October did not see significant decline! This is very important.  Month after month we have seen a decline in the number of sales locally.  The fact that we are seeing a possibility of leveling out may indicate a trend towards improvement, but don’t expect to see significant improvement before May ’08, and definitely not to the robust sales and gains we saw from 2003-2006!

Number of pending sales for the month of October have increased!  This is the first increase in pending sales that we’ve seen since February!  Traditionally from February on through July/August, real estate pending sales trend upwards and then downwards in the fall.  It’s too early to tell what the impact will be, but seeing a rise in pending transactions right now is very good news.

What Needs Improvement:

Sales are currently at their lowest point in the past six years.Meanwhile, we
haven’t seen the direct holiday season impact yet (December is usually
the worst month of the year for real estate sales)!  What is promising about this is that pending sales are up, contrary to traditional market trends.  At best right now I think we’re hoping to see the market remain like this until the spring, but I suspect that we’re going to see further decline through the holidays, which is going to further frustrate homeowners and further depress housing prices.

Wrap-up- What Does This Mean?

Essentially, it means that the market is still in very rough shape and is going to need time to work itself out.  We’re not looking at a 3 month or 6 month turnaround here, and we’re not going to see another big boom like we were in for a very long time, possibly decades.

For Homeowners, I suspect you are going to find that the market continues to decline, perhaps as low as 15% from 2006 sales values once all is said and done. If you’re trying to sell your home right now, I highly recommend you actually go out, view your competition, and try to assess the value of the other homes your potential buyers will be seeing.

Also, make sure that your agent is being aggressive in trying to get your home sold!  Agents are having a very hard time, our marketing costs have easily tripled because we’re fighting to make sure our listings are actually seen!  Part-Time agents and small-volume agents are hit especially hard because there’s so much less selling right now, so choose your agent carefully.

For Home Buyers, if you’re waiting for the market to bottom out before you jump in, be very cautious about how you do it.  Yes, Values are down 8%-10%, and they may go as low as 14%-15%, or the may not.  Also, rates are very low, and they may or may not go down as well, but keep in mind that the last time the rates dropped, the lending criteria went up, making it harder to get the same deal on your loan despite a drop in prime rates!

Lenders are more cautious now, as they should be, but you don’t want to hold out to save another $10,000 on the price of the home if the monthly payment is going to be the same (or higher) due to more stringent lending criteria.  There’s simply no sense in paying the lender more because you waited until the homeowner took that extra $10,000 discount off his home.