Yesterday I was reading about new home sales on a national level being down by a wide margin in both number and sales price on a year-over-year basis. Buried in the data was a tidbit about the inventory of unsold homes would take over 10 months to burn through at the current pace of sales. You can probably guess that this made me curious above the inventory levels and current pace of sales in the Garrett County market, so I did some searching and found this website from the Maryland Association of Realtors which provides just such data for all of Maryland's counties.
Here's what I discovered. This time last year in Garrett County there were 514 active listings (inventory) and the monthly rate of sales for May 2007 was 31, thus Garrett County had 16.58 months of active inventory (which in itself was up significantly from 2006 and 2005). Fast forward to 2008, now the current number of active listings is 721 and the number of sales for May 2008 was 26, thus Garrett County now has 27.73 months of active inventory. This means that at the current pace of sales even if no new spec houses were built and listed for sale and no additional existing homes were listed for sale it would take 27.73 months (until approximately Labor Day 2010) to burn through the existing inventory of unsold homes/properties. Well and improving daily, indeed!
With numbers like that I wouldn't even think about making a full price offer at this point. Buyers certainly have A LOT of negotiating power though. The situation looks pretty bleak for those pre-foreclosures I'm seeing on foreclosures.com and RealtyTrac given that they have little or no chance to let the market absorb their property sale prior to going into full-blown foreclosure or being forced into a short sale or auction situation. These special situations might help a buyer get a discount while helping the seller get out from under a crushing burden of debt so in a way it's a win-win situation and definitely worth checking into if you are in the market.
Don't forget to check back to Dan's Deep Creek Blog for future Deep Creek real estate market updates.
Thursday, June 26, 2008
Garrett County Market Update ..
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Now more than two years later consider the advice I gave in this post versus what some of the local real estate agents were advising below.
March 10, 2008: "I do not know if we are at the bottom of the real estate market yet, but we are close. Even if home prices continue to decline they will not go low enough to compensate for the increase in interest rates to come." Wrong on two accounts!
March 10, 2008: "Send me a thank you card in 5 years when you use the equity in your vacation home to help send your kids to college!" This one is laughable to the extent that it is stated as only a true used home seller and real estate daytrader/speculator could manage!
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