Housing costs price many out of market

Median home price in county is $240,000

Median home price in county is $240,000

September 09, 2005|By DANIEL J. SERNOVITZ


Daniel Johnson, who recently bought a home in Hagerstown after moving to the area three years ago, nearly gave up looking in Washington County because of the cost of houses here and the red-hot seller's market.

"My wife and I went through a process of realizing that we may not be able to purchase a house (here)," said Johnson, senior elder at Fellowship Bible Church. "The housing market was so hot and so quick that if you were slow in any sort of way, you kind of missed the sale. âEUR¦ It's a seller's market, and it's actually somewhat hostile to the buyer."

According to Metropolitan Regional Information Systems Inc., which tracks real estate trends, the median price of a home sold in Washington County soared from $125,000 in July 2001 to $240,000 in July 2005, an increase of 92 percent.


In contrast, according to data from the National Low Income Housing Coalition, the median income for a Washington County family increased 6.67 percent from 2001 to 2004, the most recent year data was available from the housing coalition.

As more houses are built and the prices for those houses continue to climb, experts say the hardest hit will be those who even now are scrimping and saving to buy modest homes in Washington County.

"The problem is, with the housing prices escalating at the levels they are escalating, houses are becoming more difficult to buy," said Barb Spielman, housing advisor for the Hagerstown Home Store, which offers counseling and advice to residents seeking to buy homes in the region. "Unfortunately, it's not a sunshiny picture," she said. "You need the community of Washington County to come together and figure out a way to make sure the people in Washington County stay in Washington County."

Spielman said several factors are combining to the detriment of the region's working families. As part of the seller's market, she said, residents are moving west from places such as Frederick and Montgomery counties, to stretch their real estate dollars.

"When the residents of Montgomery and Frederick County can't afford to buy houses where they work, they come up here," Spielman said. "They've been coming up and they've had absolutely no qualms about paying the list price. Then, people in similar neighborhoods are saying, 'If that's what they can get in their neighborhood, why can't I get that in my neighborhood?'"

The result, she said, is that Washington County residents increasingly are finding that houses that once might have been within their grasp are now far beyond their means.

Spielman said the Federal Housing Administration recommends first-time homebuyers spend no more than 29 percent of their gross monthly income on mortgage payments. For someone earning $25,000 a year working in a distribution or warehouse job, she said, that means a monthly mortgage payment of $600, and that means a home that costs between $70,000 and $75,000.

What that means, she said, is downsized dreams for many Washington County residents.

"They really do need to rethink their expectations," is what she said she tells many residents who seek advice from the Home Store. "Build equity. Don't look at your first home as either your dream home or your last house."

More frustrated

Johnson said many members of his congregation fear they will not be able to buy homes in Washington County, and within the wider community there is a fear about whether their children will be able to live here.

"We have more people who are frustrated about whether they may be able to afford to purchase a house," he said. "You find people who live here, who work here, are actually struggling to compete with people who are making a lot more (working outside the county)."

Washington County Planning Director Michael Thompson said the county has tried to control development and slow the increase in housing costs through several measures, including the use of impact fees. At the same time, he said, officials recognize it is not a matter of whether growth will occur but rather at what rate and in what form.

"The county needs to grow, there's no question about that. If it stops growing, it is going to die. What you're trying to do is set your volume," Thompson said. "We don't have control over it, the growth is coming."

Thompson said that as land values continue to climb, affordable housing is becoming an increasingly serious problem.

"It's hitting everybody, and they're all trying to find answers for it âEUR¦ Handling growth is just like raising kids. There's no manual for it," he said. "It's not that we don't care about it. We all have families and kids and we're looking at how they're going to afford to live here. When we go home, we're facing the same problems everybody else is."

The higher cost of housing doesn't deter everyone.

After renting an apartment in Hagerstown for the past five years, Jennifer Frankenberry in June closed on a house in Smithsburg.

She said she was outbid on several houses, including one on which she bid $169,000 but that sold for $205,000, and she was frustrated at the prospect of ever buying her own home.

With help from the Hagerstown Home Store, though, she carefully considered how much she could afford to spend a month and did not relent.

"It's very hard to compete," she said. "It's just outrageous, I actually have to work two jobs and I just can't compete."

A single mother with a full-time job and a second part-time job, Frankenberry said she works about 60 hours a week to cover her expenses. She said she was able to find a home and, while her budget is tight these days, she does not regret the decision.

"It's worth it. I always told my son before he graduates high school I would have a home with a yard for a dog and a trampoline," she said. "For me, as a parent, it's important for you to have that for your child."

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