Frederick Md Homes For Sale – The Historic District

The number of new foreclosure filings has been declining throughout 2011, in December they fell 9% from November to a 49-month low. That said, the number of homes already in foreclosure and coming to the market is steady. The end is in sight, but still far down the road, maybe 3 to 5 years.

These statistics that we see in the headlines always need to be filtered through the important fact: All Real Estate is Local.

There are 4 states that house 50% of the foreclosures in the nation:

• California, 26%
• Florida, 12%
• Michigan, 6%
• Illinois, 6%

Maryland is number 28 on the list of 50 states, and Frederick County is second to Prince George’s County.

All Statistics are from RealtyTrac.com.

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The Highland  Group
Chris & Karen Highland *        301-831-9947
Turning Point Real Estate “ 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119

There are Three Hot Topics when we talk about predictions for the Frederick Real Estate Market in 2012. Affordability, Distressed Properties, and Inflation.

Concerning Frederick Home Buyers

Affordability is not just the buzz word, it is the Hot Topic. With the combination of low prices and historically low rates, affordability is at an all time low. Take a look at these infographs for an explanation:

In other words, the percentage of the average household’s budget that goes towards housing costs is below the 30 year average, in fact, the lowest since 1971.

The ratios of average housing prices to average income is also below the 30 year average. And…

The combination of prices and low rates makes for an average housing payment that is below the 30 year average.  It is truly one of the most affordable times to buy a house in the last half century.   That is if…

• Your job is stable
• You have some cash for a downpayment [3.5% for FHA], and
• You plan to stay in the home for 5 to 7 years.

Concerning Frederick Home Sellers

Homeowners and Home sellers are primarily concerned about the value and selling price of their home. The not-so-great news is that we will continue to have a steady influx of distressed sales, ie. short sales and foreclosures, for the next 5 years, maybe longer, depending on the economic recovery.

Concerning Everyone

Inflation is on everyone’s mind. Real Estate is still a good investment and hedge against inflation. Consider these statistics:

and…

This last chart gives a low inflation outcome and a high inflation outcome. Either way, making mortgage payments at today’s low rates for the next 30 years is a guaranteed hedge against inflation.

_____________________________________________________________

The Highland  Group
Chris & Karen Highland *        301-831-9947
Turning Point Real Estate “ 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119

Fewer Frederick Foreclosures

Currently, there are 16 homes for sale in the City of Frederick that are foreclosures, or Bank-owned. There are 34 for sale in Frederick County. This is a low for the year.

Year-to-date, 264 bank-owned homes have sold in the City of Frederick, 427 have sold in the entire county. In 2010, the number of foreclosures sold in the City was 447 (a 38% decline) and in the entire county – 694 (a 41% decline) according to MRIS records.

Are Foreclosures on the Decline in Frederick County?

It would seem that foreclosures in Frederick County declined year-over-year since 2010. Both in the number of foreclosed homes on the market, and in the number of foreclosed homes sold.

One Possible Explanation – Foreclosure Freeze

In the fall of 2010, with the “Robo-signing” scandal in the news, several banks suspended foreclosure proceedings in  Maryland, as well as many other states. What this accomplished was just to postpone the inevitable foreclosures, pushing them into 2011 and 2012. According to the Standard & Poor (S & P) 2nd quarter report, Maryland currently has a shadow inventory of 24 to 36 months, the 8th largest in the country.

What is Shadow Inventory?

Shadow Inventory refers to the number of houses in some state of foreclosure which are not yet on the market.  Many of the homes that were delayed in the foreclosure process and would have been worked through the process and on the market today, will be showing up on the market next year. Many sources, like James Saccacio, CEO of Realtytrac, say we will continue to see new foreclosures reach the market in a steady stream for the next 3 years.

HUD has a program called “Good Neighbor Next Door”. This program provides discounted housing for Law enforcement officers, public school teachers and firefighters/emergency medical technicians.

These public workers who want to live in and contribute to community revitalization can buy approved HUD foreclosures for 50% less than the list price.   YES, half-priced homes.

Eligable single-family homes are located in revitalization areas and are on a list availble at the HUD website.   Buyers must live in the home as their primary residence for 36 months and must buy the home as-is, as with most foreclosures.   Buyers must meet the requirements, also on the HUD website.

As of today, there are 8 homes listed in Frederick on the HUD website which are eligible for this program.   They range from $87,000 to $206,000, from 2 to 4 bedrooms.   Keep in mind that many of these homes need repairs, and many are eligable for FHA 203K financing.

Read more about HUD’s Good Neighbor Next Door program.   Call us for more details about buying HUD Foreclosures.

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The Highland Group – Real Estate Teams

Chris & Karen Highland *
Frederick County MD Real Estate Agents

301-831-9947              
  Real Estate Teams, LLC
Karen@highlandrealestategroup.com

Where are the Deals and Steals in Frederick Real Estate?   They are in Short Sales and Foreclosures.   Foreclosures tend to sell about 15% below market and short sales go for about 10% below market value.   These “distressed sales” make up about 20% of the listings in Frederick, and about 25% of the sales each month.

Short Sale vs. Foreclosure

So what is the difference between buying a short sale or a foreclosure?   Briefly, foreclosures are already bank-owned and the buyer will be negotiating with the bank. The negotiations usually take 1 to 3 days, like a traditional sale. The sale price is usually lower than the price of a short sale. The home is vacant, and probably has been for a while in today™s market.   With vacant homes we usually see more damage due to vacancy.   Sometimes the type of repairs make the house ineligable for FHA financing.   We also see condo’s that are ineligable because so many condo dues are in arrears.

With a short sale, the home is lived in until close to the time of settlement, so the home tends to be in better condition, without the problems that come with vacancy, at least.   The main drawback to purchasing a short sale is the time it takes to complete the transaction, usually between 3 and 6 months, and the lack of clarity along the way.   The lender(s) have to be notified of the offer and give their approval (third-party approval).   If there are multiple lenders involved, this can take time.

Short Sale Tips

If the buyer has the patience and ability to have a flexible moving date, a short sales purchase can be a great value.   You can generally find a home in fairly good condition for under market value.   The upgrades and repairs can often be minimal.

The short sale transaction can go a lot smoother if the agents involved, both buyer and seller agents, are trained and experienced.   There are a few national certifications that equip agents to deal with the demanding details and specialties of short sales.   CDPE, Certified Distressed Property Experts, is one.   Chris Highland is a CDPE and has experience with short sales.

Use our MLS Search to search Short Sales in Frederick Md.

Use our MLS Search to search for Foreclosures in Frederick Md.

The Highland Group – Real Estate Teams

With new HAFA government incentives and a better grasp on standards and methodology, banks are increasing the number of short sales they are capable of doing.   Statistically, banks lose about 30% on a short sale, compared to 50% on a foreclosure, another incentive to work harder at a successful short sale process.

The issue holding up most short sales has been the 2nd lien holder.   New government incentives for the 1st mortgage to share more with the secondary lender will help.   The addition of a new $6000 cash incentive to investors and 2nd lien holders will also be a motivation for better cooperation.

The new program also mandates that the lender notify the seller within 10 days of acceptance of the offer.   This should help cut down on the  time it takes to get a reponse to the buyer.   Well, in theory, anyway.

HAFA will launch on April 5, 2010, and many expect with the streamlining of the short sale process, we’ll likely see more of them.

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                                                                 The Highland Real Estate Group                                            
                                                 Chris & Karen Highland *        301-831-9947
                                                                                Real Estate Teams, LLC
                                                                    email us: isell4u2@msn.com
                                                                    TEXT US:   301-401-5119