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Taking advantage or taking a risk?

Lower real estate prices are allowing some Washington County families to realize their real estate dreams

December 01, 2012|By ARNOLD S. PLATOU | arnoldp@herald-mail.com
  • Michael Betson stands near the foundation of his new home which is under construction in Brownsville, Md.
By Joe Crocetta, Staff Photographer

Having sold their previous house, Michael and Kanda Betson and their teenage son are living in a 30-foot camper while Michael oversees construction of their new home in Brownsville.

Paul Plume and his wife, Courtney, have fulfilled his lifelong dream of buying a farm, but their plans of building a new home on its Indian Springs acreage have hit an economic snag they hope is only temporary.

Charlie and Lorena Sanbower have taken a loan on their current house to finance construction of their new one near Hagerstown while hoping to sell their old one soon.

Never mind the economy’s still bad, but these people and about 150 other families are buying brand-new homes here, determined to make the circumstances work for them.

All of the families are like pioneers — forging ahead at a time when many potential new home buyers still are sitting back — but they aren’t being reckless, at least not the three families who talked to The Herald-Mail this past week about their efforts.

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Each of them is well aware of the shaky economic ground onto which they are walking.

“It’s a terrible economy,” said Charlie Sanbower Jr., who is 54 and drives a truck for a living. Building a new house right now “is just a chance you take.”

“I’m 50/50 on the economy. It can go either way,” Sanbower said. “Either we’re going to go over the financial cliff or they’re going to fix the problem.”

Paul Plume, who is 47 and owns a small fiber-optics business, began seeing project bidding opportunities for his company “really start to slow down” this past spring. It seemed that larger businesses were growing more hesitant as the presidential election neared “and then, through the whole election, it’s been pretty dead,” he said.

“And I just haven’t seen it pick up yet. And I, personally, am afraid that since Obama got elected, the bigger business people are going to hold onto their money,” Plume said. “They’re going to wait to see how this Obamacare thing is going to affect them.”

Michael Betson, who is 46 and is a mechanic, is worried about the economy, too.

When asked his view of the economic future for both this area and the nation, Betson has a one-word answer — “Scary.”

Economic tidal wave

Ten years ago, Washington County’s economy was steady, at least for home builders and the Realty market in general.

The years 2002 and 2003 contained but a ripple of the economic tidal wave that was coming as mortgage companies sprang up, offering low-interest starter loans and easy credit terms nationwide.

Here, the county and Hagerstown governments issued permits for construction to begin on about 1,000 new houses in 2002 and again in 2003. The number swelled to 1,187 in 2004. And as demand rose, it surged to 1,415 in 2005.

That year, sales of all kinds of housing — new and existing — broke modern-day records here, according to the newspaper’s review of data from Metropolitan Regional Information Systems Inc. It tracks sales in communities in several states.

MRIS data includes only those sales of brand-new homes that are reported to it. Industry observers don’t think all are.

Overall, the market here shot from the total $217 million paid in 1,508 sales of new and existing houses in 2002 to a dizzying $573 million total paid in 2,237 sales in 2005 as buyers competed for homes and prices soared.

But by spring 2006, the economic wave had crested and soon began to subside in the pond that is Washington County and in the greater ocean that is all of America.

Nationwide, the meaning of adjustable mortgages dawned as interest rates reset themselves and jumped.

Suddenly, the riskiness of all of the hot new debts was spelled out in what seemed cold new words — foreclosure, bankruptcy, unemployment and short sales.

Officially, the nation’s recession began in late 2007.

Meantime, in Washington County’s new home developments, sales fell to 659 houses in 2006. In the next few years, it continued to drop, so much that by 2011, the wave of buying had subsided to just a ripple — 183 startups, according to the newspaper’s review of the records.

And as demand shrunk in the wider Realty market for all kinds of housing, both values and selling prices slipped.

Sales in the county plunged to a total of $415 million paid in 1,599 sales in 2006, MRIS data shows. By 2011, the market had ebbed to $183 million total paid in 1,210 sales.

Thus far in 2012, sales in the overall market have dipped even lower, according to the newspaper’s calculations using MRIS records. Data isn’t available yet for November.

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