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Finally, a ray of hope on housing

November 23, 2008|By ARNOLD S. PLATOU

TRI-STATE - Don't break out the champagne yet, but for those with a house to sell, there is good news: Washington County's real estate market increased last month for the first time in nearly three years.

The number of people buying homes rose slightly, boosting the market 2.4 percent to $19.2 million compared to the $18.8 million spent here in October 2007, according to Metropolitan Regional Information Systems (MRIS) Inc.

At the same time, however, individual sales prices continued to slide, and the time it takes to sell each home kept getting longer here and almost everywhere else throughout the Tri-State area.

But this is the first time in 32 months - since February 2006 - that Washington County's market, the region's largest west of Frederick, Md., has grown compared to total sales in the same month the previous year.

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And that alone is reason to cheer, said Joan McLernon, president-elect of the Pen-Mar Regional Association of Realtors, which represents more than 800 area agents.s

"Any news is good news, and I will take it for all it's worth," McLernon said. "And if the buying public has woken up and seen what wonderful buying opportunities there are out there, that's wonderful."

Pockets of hope

Good news has been hard to find in the housing market the past few years.

Nationwide, the market changed in 2006 as the riskiness of subprime loans hit the news, loan credit standards tightened, foreclosure became a household word and housing prices slowed their ascent, then began to drop.

In Washington County, the real estate market peaked in 2005 with a mind-numbing 45 percent gain, according to MRIS data.

In that one year, buyers grabbed up a total of 2,254 houses here for a total of $578 million, a record high.

Throughout America these days, the news overall still is glum though there are pockets of hope, the National Association of Realtors (NAR) said.

The median price of houses fell 9 percent to $200,500 nationwide in the third quarter - July, August and September, NAR said last week.

"Median price" measures the midpoint in the range of selling prices, so a few high-ticket deals don't skew the result. Thus, half of the houses sold across the nation in the third quarter went for more than $200,500 and half went for less.

Prices fell in 120 of the nation's 152 metropolitan statistical areas and were steady in four others, NAR said.

The good news is prices climbed in the remaining 28 areas, NAR said.

The price rose the most in the Elmira, N.Y., area, shooting up 12 percent to $105,000. On the other hand, the Riverside, Calif., region was hit the hardest, with the price plummeting 39 percent to $227,200.

Also hurting was the Hagerstown-Martinsburg, W.Va., metropolitan area, MRIS data showed. Its median dropped 12.9 percent to $181,500 in the third quarter from $208,400 a year ago.

NAR President Charles McMillan said in a press release that it's hard to compare one area to another because situations differ.

But, he said, one negative across America is the so-called distressed sales - foreclosures and short sales. He said they accounted for 35 percent to 40 percent of the deals in the third quarter, pulling down prices nationwide.

Some gains

There are a few bits of good news locally.

In all, 89 homes were sold in Washington County last month, six more than in October 2007.

More substantial is September's gain. In all, 97 homes were sold here that month compared to 84 the previous September, MRIS figures show.

The past two months are the only ones in the past 24 months tracked by The Herald-Mail that show gains in the numbers of sales.

But while the pace has picked up, the prices have continued to go down.

In September, MRIS data shows, the median price of homes sold here fell 17 percent to $190,000 from September 2007, when the median was $230,000. Last month, the price dipped 6 percent to $187,000 from the $200,000 of October 2007.

How much of that drag on prices is the result of cheaper deals that lenders take on foreclosure and short-sale properties is tough to judge. MRIS doesn't seem to track such sales and NAR hasn't listed them, either.

McLernon, a Hagerstown Realtor, said she thinks such sales are a smaller portion of the local market than the 35 percent to 40 percent that McMillan cited nationwide.

"Maryland will always do better than the national average simply because of our proximity to the national capital," McLernon said. "... We have a huge amount of people employed in the government sector and a huge amount in the high-tech sector, so our area is a lot more stable than Florida, where you have so many retirees, or Michigan, where you've got the auto industry."

More likely to blame here are the crowded housing market and the fear that many consumers have about the economy, she said.

Supply, demand

During the heady days of 2005, there was an average of 607 homes for sale in Washington County. On average, sales were taking 50 days.

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