Sal Sedita

Mid Year 2008 Review - Cecil County, MD Housing Market

The Housing Market showed continued weakness through the second quarter, as the number of sales declined 30% to 456 units, compared to the prior year-to-date total of 656. The number of properties available for sale has increased by 9.7% to 1,055. Pricing indicators (chart 1) show the median sales price declined 3% in June 2008, compared to June 2007 and continuing 2007’s downward trend. Similarly the average sales price declined 7.8%, from $291,235 to $268,339.
 
The days on market until a property is sold has increased to 143 days versus 121 days last June. Coupled with the 9.7% rise in inventory over last year, homes are typically selling with substantial reductions from their original list or asking price, as motivated sellers attempt to find the “new market price” for their property – that is, the price a willing and able buyer will pay today. To energize this market, a motivated seller must aggressively price their property in relation to comparable homes in the area and showcase it with strong curb appeal - this in turn will stimulate buyer interest and activity.

Looking at three housing market indicators on a monthly basis – the number of new listings on the market, the average number of days it takes for a home to sell and the average sold price as a percentage of average list price – there appears to be continued softness in this housing market.

For the first six months of 2008, the number of new listings has decreased 13% (chart 2) compared to the same time period last year – the first indication of some improvement.  The average time on market prior to sale, has increased in comparison to last year and has been fairly volatile over the past 6 months (chart 3)  - though with fewer than 500 transactions for our analysis, this is to be expected.  Finally, the average sold price as a percentage of average list price has declined in comparison to last year, with the past six months’ data showing the same volatility (chart 4).  This decline, coupled with the increase in days on market, directly correlates with the rise in the number of homes for sale. That is, there are more choices for buyers, more competition for sellers and more price negotiation.

There is a saying that “timing is everything” – yet attempting to wait for prices to hit the so-called bottom is even trickier in housing than the stock market.  As a buyer, you might get the timing right on price, but when you seek financing, interest rates may well have increased. The end result - waiting to buy could work against you. You may actually end up paying more over time, with higher monthly mortgage payments than if you had purchased now.

If you are planning on buying a home, either as a first-time buyer or as a move-up buyer, focus on the opportunity you have today to find the home you really want, with access to financing with low interest rates, and be less concerned about a potential short-term decline in price. Over time, as in past real estate cycles, prices will rise again.

(All reports presented are based on data supplied by MRIS. MRIS does not guarantee nor is it responsible for its accuracy. Data maintained by the MLS may not reflect all real estate activities in the market. Information is deemed reliable but not guaranteed. Data is as of 7/15/08)