MoCoRealEstate

2009 Real Estate Survival Guide for Montgomery County

February 17th, 2009 Categories: Market Updates

Even though we’re about six weeks into 2009, the upcoming Spring market heralds the “real” start of our real estate market.  Although buyers and sellers are being continually battered by bad news, know that homes are still selling in Montgomery County. In fact, more homes sold the 2nd half of 2008 compared to the same period in 2007 in Montgomery County. Still, expect 2009 to be a rocky year. Here’s a quick guide to help navigate our market.

Employment

People can’t buy homes without having jobs. The Washington D.C. Metro area has the lowest unemployment rate of the 15 largest metro areas at 4.4% in November inching up to 4.7% in December (the national average is over 6.5%). According to the Center for Regional Analysis, we actually expect to see an increase in jobs for the region. This is definitely good news for our housing market.  We’ll keep an eye on unemployment rates throughout the year.

Mortgage Rates

Rates for mortgages under $625,000 are around 5% in our area giving buyers more buying power.  With the signing of the federal stimulus package today, the conforming jumbo limit will be increased to $729,750 in the coming weeks.  It’s a different story for jumbo loans. Rates are higher and can vary quite a bit between lenders. By shopping around, we’re still seeing clients get good rates. With all loans, buyers need good credit and must be well qualified to get approval. We expect rates to stay low for the year.

Distress Sales

This is a good news/bad news story. A large number of foreclosures and distress sales bring prices down for everyone. The good news – according to RealtyTrac and others, it appears that subprime foreclosures may have peaked. The bad news – we estimate that 25% of all available homes on the market in Montgomery County are distress listings or are bank-owned. Also, some expect a new wave of “no doc” and “Alt-A” loan foreclosures. Until this inventory is reduced, we’ll continue to see downward pricing pressure in some segments of our market.

Confidence and Fear

Not long ago, homeowners readily moved-up to bigger/better homes confident their current homes would sell. Buyers jumped into the market and quickly paid list price and more. How things have changed. Rightfully so, many buyers are simply too fearful to make a purchase. If you have a secure job and have long-term plans for a home, then it’s a great time to buy. But recent events in the stock market, news of job losses and bad housing reports are strong headwinds to resist. We’ll know that confidence is returning when we see increases in contracts and declines in available inventory.

Having an experienced guide is the key to make it through today’s turbulent market.  Contact us anytime for help to get the most out of your home sale or purchase.

Posted by Bruce Lemieux

This entry was posted on Tuesday, February 17th, 2009 at 8:25 am and is filed under Market Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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