A diversified job market anchored in government, information technology, telecommunications, aerospace and defense is pushing the Maryland economy forward even in the midst of the worst economic crisis since the Great Depression. Although not at full capacity, employment levels are at some of the healthiest in the country, translating to a stronger Maryland housing market.
In Baltimore home sales are rising with the majority of sales being foreclosures or troubled bank assisted sales. The Baltimore market has been severely impacted by the epidemic of foreclosures, and thousands of homes sit vacant awaiting the next round of foreclosures projected to hit in the early part of 2010.
Foreclosures have had devastating consequences on housing prices in Baltimore and else where in Maryland, where many areas have been declining at annual double digit rates. Baltimore should be assisted by the expansion of the home buyers' tax credit with more sales in 2010. But as bankers slash prices home values are forecast to decline an average of 9.5% for the year.
The housing crash has been anything but kind to Columbia, the state's second largest city. After nearly a half century of almost consistent growth, Columbia faced the financial crisis with multiple cancellations of new building projects. Home sales were off by more than half and the fallout seemed to be endless.
| City |
Forecast |
| Baltimore |
− 9.5% |
| Prince George's County |
− 11.6% |
| Bethesda |
− 10.8% |
| Silver Spring |
− 6.3% |
| Columbia |
− 8.1% |
But improving home sales triggered by the government's tax incentives is producing a stronger real estate market with sales projected to rise in 2010. However, the volume of troubled less expensive homes will weigh on the market, which is forecast to see average housing prices decline 8.1% in 2010.
A huge drop in housing prices has produced a larger volume of home sales in Prince George's outside of Washington, D.C. The number of sales should escalate as move-up buyers take advantage of the federal government's tax credit even as home prices decline to reach a balance in the marketplace. Low mortgage rates and lower priced foreclosures are the driving force in Prince George's, which was over-built during the boom.
Although inventory has been reduced, the over supply of homes for sale will have a lingering impact on the market pressuring prices downward. Housing prices in Prince George's are forecast to deflate 11.6% in 2010.
Multi-million dollar priced homes in Bethesda have dropped to half their value in many areas as the jumbo mortgage market remains stagnant. The impact of restrictive banking practices has a major affect on Bethesda, where home prices are some of the highest in the state. However, sales should improve with additional government incentives for bankers. Bethesda is forecast to sustain average deflation of 10.8% on home prices by year's end.
A reduction in the number of homes on the market has acted to boost sales in Silver Spring. The first signs of the market to stabilize are developing as deflation slows in all but the higher price ranges. However, the economic downturn is still troubling for Silver Spring. Government incentives should produce more sales in the early part of the year, but housing prices are still forecast to decline at 6.3% in 2010. A pent up supply of foreclosures will slow the market's recovery.
