A stronger job base than many other regions of the country should help boost Maryland’s housing markets over the next year. As the financial crisis enters its third year, housing prices in most of Maryland are moving down with high foreclosures making an impact, despite a diversified employment market.
Maryland ranks tenth in the nation in foreclosures and about one in seven homeowners with late mortgage payments. In Baltimore the foreclosure crisis is running at epidemic levels with tens of thousands of homes that are vacant. But because of federal guidelines that restrict Hardest Hit fund proceeds to high unemployment areas, Maryland is excluded from the program. It’s a quirk in government program guidelines that mandates only the highest unemployment areas should receive aid.
Foreclosures are hurting the Baltimore economy, perhaps at levels that many locals don’t yet realize. But as the economy withers a second blow from the housing crisis the housing market is projected to soften in Baltimore further. Bankers and mortgage companies will slash prices on foreclosures and short sales to get them sold and pressure neighboring home values. Baltimore is forecast to sustain average home price deflation of 9.7% for the year.
In Columbia, the state’s second largest city the financial crisis has had a massive impact. After decades of growth new building projects came to an immediate halt damaging the local economy and sending workers scurrying for the unemployment lines. A fall off in home sales was temporarily helped by the buyers’ tax credit, but the market dove for cover after it expired. Lower priced homes should bolster the market over time as foreclosures are cleared out. Columbia is forecast to see average home prices drop 8.5% in 2010.
| City | Forecast |
|---|---|
| Baltimore | -9.7% |
| Prince George’s County | -12.9% |
| Bethesda | 10.6% |
| Silver Spring | -7.3% |
| Columbia | -8.5% |
Outside of the nation’s capitol in Prince George, an unprecedented building boom was met with the fallout of a housing catastrophe as foreclosures mounted. Now bargain hungry homeowners and investors are piling in to purchase homes at prices that haven’t been seen in years. Home sales escalated with the federal tax credit, and now bankers are trying to work with some homeowners hoping they’ll continue to pay mortgages while they work out short sales.
Low mortgage rates and cheaper foreclosures are the driving force in Prince George, which is forecast to sustain 12.9% in average deflation through year’s end.
In Bethesda, where many members of Congress make their homes among rich elite bankers to toil with the nation’s economy the impact of the foreclosure crisis has been less severe. Home prices are still at some of the highest levels in the country, but the market won’t escape the year without fallout from the crisis forecast to deflate average home values 10.6% in 2010.
In Silver Spring the first awkward signs stabilizing came from the federal tax credit, but a pipeline of troubled properties will hamper any sort of real recovery for some time in Silver Spring as those thrown out of work by job cuts stop making mortgage payments. Housing prices are forecast to deflate 7.3% in 2010.