I can’t really try to put a positive spin on the real estate sales numbers in Aberdeen, MD for the month of October, 2011. Since I work in the market, I knew that they wouldn’t be great, but I didn’t think they would be dismal! Only 9 homes changed hands, and this is only one month after the official end of BRAC (Base Realignment and Closure). I know some people personally who are part of BRAC that have decided to hold off on buying, mostly without giving a good reason, but I think it’s because of the market’s overall direction. You see, I have been working with some of these people for as long as six months now, and we have watched the market continue to slide downhill.
What is the cause of this nonsense? Well, the new lending standards have definitely been a part of it. Buyers are being asked to provide documentation that they didn’t know existed, and this is often late in the mortgage process, well after it should have been requested. Another reason is the inventory of distressed property. Last year, there were quite a few more foreclosures and short sales on the market, thereby a lot more deals to be had. There were 7 distressed property sales in Aberdeen, MD last October, as compared to only 3 this year.
What is another reason for the pathetic numbers? It goes right back to cold feet. I had a buyer who was in the process of purchasing his first home at a whopping 25% less than the appraised value! On top of that, it was a USDA loan, so he wasn’t required to put any money down. All he had to do was show up and sign on the dotted line. When the time finally came for settlement, his feet went from cold to frozen, and he refused to move forward. He lost his deposit and the home that he loved when he first saw it.
Is there a silver lining? Oh yes, the economy is improving- albeit slower than we would like- and mortgage interest rates are still lower than ever. Housing prices are still at 7-year lows, and the amount of inventory will probably continue to be high. Search real estate for yourself at www.scottmillerrealestate.com.
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