Hot housing market continues amid signs of problems -- Gazette.Net


The number of days homes remained on the market before selling continued to decline last month in Montgomery and Frederick counties as sales and prices continued to rise, according to figures released this week by research firm RealEstate Business Intelligence.

The upward trend in prices has led to less affordable homes for first-time buyers, while foreclosure filings rise in the area.

In Montgomery, the average days a home remained on the market last month was only 35, down from 57 in July 2012. In Frederick, the number of days declined to 55 from 68 a year earlier, according to RealEstate Business, a subsidiary of Metropolitan Regional Information Systems of Rockville.

But the area’s most expensive homes are generally taking longer to sell. A 33,000-square-foot new custom home in Potomac listing for $18 million — the most in the two counties listed on — has been on the market since February.

Most such higher-priced homes “do not run parallel with general market conditions but sell based on the timing of finding the right buyer,” said Marc Fleisher, head of The Fleisher Group, a Long & Foster Real Estate agency in Washington, D.C., near the Montgomery border. He is the agent for the Potomac 10-bedroom, 15-bath residence.

“Just when you are least expecting it, the buyer surfaces,” Fleisher said. “These buyers are elective buyers looking for a special home when the time suits them.”

By contrast, a four-bedroom, three-bath Bethesda home sold for $804,000 by The Fleisher Group in late June was on the market less than a month.

Last month, the number of existing homes sold in Montgomery jumped by 32 percent from a year earlier to almost 1,300 units. The median price rose 10 percent to $435,500.

In Frederick, sales increased by 57 percent in July to 340, while the median price rose by 12.5 percent to $282,750.

Frederick bucked a statewide trend of tighter inventory, as active listing there were up by 7 percent from a year ago to about 900. Active listings in Montgomery dropped 9 percent to 2,246 last month.

Starter homes less affordable

Rising home prices played a role in the first-time home affordability index dropping more than 15 points to 82.0 in the second quarter from 97.3 in the first quarter. The index, tracked by the Maryland Association of Realtors, means that first-time homebuyers had only 82 percent of the income they needed to purchase a typical starter home during the second quarter.

Besides the average starter home in Maryland rising by almost $36,000 to $231,141, a recent rise in mortgage rates and lackluster increases in median household income are factors for the drop in affordability, said Carlton J. Boujai Jr., an agent at Exit Realty Prosperity Group in Frederick and board president of the Maryland Association of Realtors.

“We are back to the same levels of affordability from a year ago, which is disappointing,” Boujai said.

No towns in Montgomery or Frederick counties made Money Magazine’s recent list of those having the most affordable homes. But one in Prince George’s County did — Largo, which had a median home price of $150,000.

“Largo has become a suburban hotspot for middle-class professionals fleeing the D.C. bustle,” the magazine said. “The housing crisis hit Largo hard and foreclosures have depressed home values, so bargains abound. Three-bedroom townhouses are on the market for less than $150,000, and 4,000-square-foot McMansions can be had for under a half million dollars.”

Two Montgomery towns — Potomac and Olney — made Money’s top earnings list. Potomac had a median home price of $795,000 and median family income of $239,330, while Olney featured a home price of $430,000 and income of $147,530.

Foreclosures more than double in Montgomery, Frederick

Montgomery County had 403 foreclosure filings in July, more than twice its level in July 2012, according to the latest figures from data company RealtyTrac. Frederick County also saw foreclosures more than double last month to 143.

Maryland had the second highest foreclosure rate nationally in July at one in every 598 housing units, about twice the national average. It was the state’s highest foreclosure ranking since RealtyTrac began issuing reports in 2005. Florida had the highest rate at one filing in every 328 units.

Almost 4,000 Maryland properties had foreclosure filings in July, up 148 percent from a year ago. Nationally, foreclosure filings fell by 32 percent from a year ago.

Maryland’s high foreclosure rate is “the anticipated result of the continued clearing of long delinquent loans,” state Department of Housing and Community Development Secretary Raymond A. Skinner said in a statement.

The state’s loan delinquency rate declined for the second consecutive quarter to its lowest reading in almost five years, he said. Few states have done more than Maryland to help homeowners avoid foreclosures, as the state has invested in housing counselors and helped people get loan modifications, he said.