Urbana MD Real Estate Market Report
The Appraisal Factor (X-FACTOR) that may derail the recovery?
For a long time the so-called experts in the real estate market have been predicting an extremely long rebound in the housing market in areas like Urbana Maryland in Frederick County because of the "Shadow Inventory" looming behind the scenes.
This predicted a new wave of new inventory was supposed to crush the housing market in Maryland and slow down any momentum that was generated by the Spring and Summer markets of 2011, 2012. To my surprise after seeing the numbers year to year from August 2011 to 2012 . .
"I think the shadow inventory is not really the cause but our market specifically in Urbana is really sucking right about now!"
The shadow inventory has not materialized yet there is another factor that is stopping the growth besides the sluggish local economy. The X Factor here may be the appraisals. Appraisals are coming low and killing deals all over Maryland right now. In newer communities like the Villages of Urbana, this is significant because of the time in between sales. In an older neighborhood, someone selling a home 20 years later does not have problems adjusting the final sales price to the appraised value.
The good news is that we should be looking to a healthy 2013 after we get over this hump.
The market itself will pressure the appraisals to raise prices, together with the decline of short sales and foreclosures in the area. The evidence of this is already showing in many places in Maryland.
Looking at the cart below, the most significant number is the "Median Sold Price" being 26.48 % LOWER compared to last year.
This affects home prices across the board and one of the reasons why appraisals are coming low.
The average Sold in 2011 was $482,890
The average Sold in 2012 is $355,000
According to the chart below, we have definitely started to see a measurable downtrend but do not panic yet. .
Days on the market is down from 77 to 51, meaning more buyers out there.
Also, the actual average SOLD price is only down 9.71%, a good sign.
In 2013, interest rates will most likely still be at record lows pushing renters in purchasing homes all over Frederick County. .. in cities such as Urbana Maryland, this will push prices higher.
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