Home Sales

Realtor Amanda Addington, president of the Frederick County Association of Realtors, left, chats with home sellers Katelyn and Cedrick Jackson in front of their three-bedroom home they plan to sell off Hillcrest Drive.

Buying a home in Frederick County right now is entirely different than it was a few months ago — and not just because of masked and social-distanced house tours.

Low interest rates have enticed potential homeowners to purchase, but they are struggling to close on the perfect house for the perfect price, as an influx of buyers try to outbid each other on a limited number of properties.

In a typical July, there would be between 1,100 and 1,200 homes on the market in Frederick County, Wayne Six, co-owner of Six, McClain & Associates, said.

But as of Thursday, there are only 530 houses for sale in the county.

It’s a recipe for disaster for homebuyers, but a recipe for success for sellers.

Six likes to look at the housing market as if it were a see-saw. When there are an average of 1,100 or so houses for sale, it puts the see-saw at equilibrium.

“That means there’s no advantage to the buyer, no advantage to the seller. It’s a fair, evenly balanced market,” he said. “COVID has altered the market so it’s not balanced anymore. It’s tilted totally in favor of the seller.”

When demand is up and inventory is down, as in any market, prices surge.

According to data provided by broker Dan Plombon of Mackintosh Realtors, the total sold dollar volume increased 23 percent from last year to this year, and the average price of a sold house in Frederick County increased by 7 percent. Meanwhile, inventory in the county dropped 46 percent year-over-year.

“Our company had a property that was listed late last week and within two days there were over 40 potential buyers that viewed the property with agents,” Plombon said. “And again within that time period there were 18 offers that were submitted just on that one property. So it’s kind of crazy.”

Of the 472 Frederick County houses sold in June, 226 of them sold in between one and 10 days.

There could be a multitude of reasons inventory is down, but lack of new construction is not one of them, said Amanda Addington, president of the Frederick County Association of Realtors. New construction numbers are holding similar to last year. Resales, however, have dropped significantly.

“I think probably uncertainty does play a role in that as well, uncertainty with regard to everything that’s going on with the pandemic,” Addington said. “And also because we are in an election year, and we always see some type of uncertainty with regards to that.”

Others simply might not want people walking through their house to tour it during a pandemic, even with safety measures in place.

“Now, my take on it is I think there are still sellers out there who maybe would have planned to put their house on the market in say, March or April and then the pandemic hit,” Plombon said. “So I think some of those people still held off on doing it and maybe they still are.”

But if there’s one piece of advice the brokers can give, it’s this: If you’re looking to sell your house, do it now.

“We don’t have enough inventory. We have been able to sell houses during this pandemic in a manner that’s safe for everybody,” Addington said. “And they are flying off the market right now because the supply is not enough for the demand.”

Agents have been able to take buyers into a house for scheduled tours two at a time, with masks. It’s not the same as running to meet a group at a moment’s notice, Addington said, but it’s still very much possible to get a home tour.

When a buyer is interested in a property, there are many steps they can take before deciding to view it in person, which makes both them, the seller and the brokers more comfortable. They can ask for a video tour, drive by the house and check out the surrounding area or even search for the property on Google Earth.

After they’ve seen the house, the rest of the buying process goes forward as it usually does, Addington said.

In addition to an increase in prospective buyers, Six has also seen an influx of homeowners looking to refinance their mortgages now that interest rates have fallen upwards of 1 percentage point. He’s on track to do a few hundred more appraisals than usual by the end of the year.

Six said the last time he saw a market like this was 2004, when the government passed a bill which allowed homebuyers to forgo a downpayment and finance 100 percent of the home price. There were only 340 houses on the market in Frederick County that summer.

But a year later, the market tilted back the other way. By November 2008, there were 2,200 homes on the market.

And like the see-saw always does, by 2014, the market picked back up.

The market will feel the effects of the coronavirus for quite some time. So for those looking to buy a house, hesitation is not an option.

“They need to be prequalified and they need to be ready to jump if a good house comes on the market,” Six said. “They need to be ready to write a contract on it right away or they’re probably not going to get it.”

Follow Erika Riley on Twitter:

@ej_riley.

(26) comments

shiftless88

I just wonder how much these realtors paid the FNP for this article. It should be labeled as an advertisement.

mrnatural1

My thought exactly shiftless!

mrnatural1

I'd say this article needs a new title.

The entire piece pretty well screams, "Only losers and idiots would buy a house in this market!" -- and then we have statements like this:

"The market will feel the effects of the coronavirus for quite some time. So for those looking to buy a house, hesitation is not an option."

Hesitation is not an option?! I'd say it's not only an option it's a very good option.

“They need to be prequalified and they need to be ready to jump if a good house comes on the market,” Six said. “They need to be ready to write a contract on it right away or they’re probably not going to get it.”

Translation: "Buy NOW! Daddy needs that fat commission!"

Seriously, why in the world should people (most people anyway) feel pressured to buy in a seller's market?! Unless there is some incredibly pressing need to own a house *right now* -- just wait.

In fact, and I'm being completely serious, perhaps buyers who are not anchored to this area should look at other markets. There are plenty of areas of the country where nice homes sell for $100K-$150K, or even less. Yes, wages and salaries are generally lower as well, but there is little/no traffic, and the quality of life is often better. You end up with more disposable income, and more free time.

Long-time FNP subscribers may recall the 2 (unrelated) women who moved from Frederick to Iowa (where my wife and I have family). This was back when the FNP still had a basic forum format. They both continued to post periodically about how wonderful life was there -- 5-10 minute commutes to work, leaving the doors unlocked, and the famous "Iowa nice" quality the people there have.

I'm not suggesting that everyone move to Iowa, but there are other options outside of FredCo.

People who buy a house now at an inflated price will likely find themselves 'underwater' and unable to sell (for a profit) for years, maybe a decade or more. That's not my opinion, that's based on the historical FredCo real estate market.

MD1756

You could have Bill Gates' money and not care about price. I might place him in a somewhat greedy category but not a loser or idiot.

mrnatural1

MD,

I think that falls in the "exception to every rule" category.

Bill Gates is in a group of a few dozen people out of 8 billion, and it's unlikely any of them will be buying a house in FredCo -- although anything is possible. If they did decide to buy a home here -- or anywhere -- it wouldn't really matter if they took a loss of (say) $100k to $200K when they sell, because they all have several billion dollars.

When referring to people of ordinary means, it is accurate to say, "The entire piece pretty well screams, "Only losers and idiots would buy a house in this market!" That applies to almost everyone who 'buys high and (potentially) sells low'.

There are potential exceptions there too. Perhaps someone MUST live in FredCo, has a large family, and cannot find what they need on the rental market.

Generally speaking though, buying a house during a market bubble is a bad plan.

MD1756

I would agree.

shiftless88

I've been to Iowa in the winter. No thanks. And the recreational activities I seek, namely hiking in mountains, does not exist there.

mrnatural1

I agree shiftless. As I wrote:

"I'm not suggesting that everyone move to Iowa, but there are other options outside of FredCo."

I mentioned Iowa because those two ladies from Frederick moved there with their husbands and love it.

My point is that it's a big country yet people seem to be fixated on major metro areas. Granted, many/most jobs are in or near cities, but a person can find work anywhere -- from small towns to mid-size cities. There's no reason everyone must pack themselves into LA; NYC; Chicago; Atlanta; and D.C.

Frederick County has absorbed more than its share of growth. Now it's time for the ugly boxes to be slapped together elsewhere.

elymus43

Stop building more homes. Elected officials only want more revenue to spend. We do not need more growth to survive as a county and city.

MD1756

"low inventory in Frederick means buyers should not hesitate to purchase"

unless you're forced to move I don't see why you would buy in a sellers' market. Wait it out if you can.

mrnatural1

Exactly MD1756! [thumbup]

DickD

It might be a good time to buy but what happens if we go into a recession or worse yet a depression. With so many people out work and some jobs loss forever, there will be lower home prices in the future. Buy now, regret later.

sevenstones1000

I remember so well the last time we saw this - and the terrible crash that followed, when so many lost their homes.

DickD

The Bush Recession and let's not forget the Hoover Great Depression. Republicans and their trickle down theory, never worked, never will. We need to elect another Democrat to bail the country out of another mess created by the Republicans.

MD1756

[offtopic]

mrnatural1

Good point seven! [thumbup]

francesca_easa

Please don't move here. We don't want to become Montgomery County. Save our green spaces and farms.

C.D.Reid

[thumbup][thumbup][thumbup][thumbup][thumbup]!!!!!

Frayou

Unfortunately, afraid it’s already too late. The irony is people who move from other counties to avoid congestion and other negative factors only creates the same coming to Frederick County.

MD1756

The growing population needs to live somewhere. If we had the resolve to control the population growth we wouldn't be in the big mess we're in (climate change, congested traffic, wastewater treatment systems that are inadequate for the growing population, etc.).

gabrielshorn2013

You make complete sense MD1756. The growing population needs to live somewhere. If there wasn't demand, there would be no need for increased supply. Everything flows from population growth and the need for shelter.

mrnatural1

The main problem is population growth. We are in a position to slow, stop, and then reverse it.

* Speaking as an anti-racist, anti-xenophobe, person who has family members who are first generation immigrants -- immigration is the source of the vast majority of our population growth. The numbers must be reduced if we are to control our population. There's no way around that.

* PSAs encouraging thoughtful family planning, as well as TV shows and movies depicting couples with no children, adopted children, or 1 or 2 of their own would help a lot.

* Any tax incentives/credits/exemptions/deductions for dependent children should be income based (means tested). As taxpayers, if someone (or some corporation) pays less, we all pay more. There's no reason we should pay higher taxes so that a well-off couple with two 6-figure incomes can get deductions for their kids. The current system is unfair and encourages larger families.

* According to the same *11,000* scientists from around the globe who warn us about GW/CC, the planet and America are well over their sustainable population. They agree that the sustainable population of the U.S. is 150-175,000,000 people -- roughly half the current number. If we care about future generations we will work to gradually get to that level.

* In the meantime, yes, people must live somewhere but it doesn't have to be here. I understand that we can't turn all of FredCo into a fortress, but there are a few things we CAN do:

a) Make developers pay their *true* fair share. That includes all required infrastructure improvements, not just schools and whatever else is nominally covered currently. That means a portion of all area road and bridge construction, increases in police and fire protection, everything associated with their ugly box developments.

b) Do not widen I-270. It is the main artery that feeds the malignant sprawl tumor. I drove up and down that road for over a quarter century, so I understand the desire for some traffic relief, but we all know that any widening would take years and create even WORSE traffic during construction, and once complete any reduced congestion would not last long as more developments would be built to take advantage of the wider road. In a few short years it would be just a wider parking lot. 270 must be left as-is.

c) Major employers should be encouraged to locate in other areas of the country. There are plenty of places that have the infrastructure in place and are actively seeking growth.

MD1756

Mr. Natural, I agree with much of what you've written below, but go a little further for those who choose to have large families. For example today's article about the couple with a small business who also have 5 children. My immediate thought is why, this day and age, would anyone have 5 children? Certainly anyone of child bearing age at this point knows about climate change (and other environmental problems even if some are too young to remember when we had rivers that caught on fire). The only ones who should get tax breaks are the ones who adopt.

phydeaux994

Montgomery County didn’t want to become Montgomery County either f_e, just like P.G. County didn’t want to become P.G. County and Howard County didn’t want to become Howard County and Fairfax County didn’t want to become Fairfax County and Loudoun County and Price William County. You can’t stop Urban Sprawl, you can only plan for it. What did Frederick County do 40 years ago when they saw it coming or 20 years ago when it sprawled into Frederick County. They did NOTHING!! In fact Blaine and Kirby and Billy invited the Developers in with Sweetheart Deals. Where were you then francesca_easa?

mrnatural1

Testify francesca! [thumbup]

mikec

Too late. The damage is done. Unless you have stock in Delauter Excavation, all this growth is a bad thing.

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