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Author Archives: Karen Highland

Home Improvement ROI

Home Improvement ROI

Home improvement ROI is an important subject for homeowners to research. Frederick homeowners are renovating their homes for several reasons in today’s real estate market. Many owners who purchased since the early to mid- 2000’s have been resigned to stay in their homes because they owe more than the house is presently worth. They realize that since they will be staying in their home for a while, they might as well make improvements that they will enjoy.

Others are improving their homes to make them more market ready when they decide to sell. Either way, it’s always a good idea to maintain and repair your home at all times during the years that you own it. When upgrading a home, it is always wise to keep with the standard of the neighborhood, or of comparable homes in your market, if you are concerned about return on investment.

Whatever the reason, making careful and thoughtful decisions about home improvement ROI is very important if you want to get the highest return. Generally, home improvements do not bring the full return of the cost at the sale of the home, but some improvements bring a better return than others. Some improvements are simply necessary to make the home more attractive to today’s buyers.appraisal changes

Cost Vs. Value in Remodeling Projects

Remodeling Website has published the 2017 Cost Vs. Value Study results, comparing the average cost for 29 popular remodeling projects with the value those projects retain at resale in 99 U.S. markets. The cost-value ratio was 64.3%. This ratio shows the resale value as a percentage of construction cost. The average remodel regained 64.3% of the cost in the sale of the home.  (The highest ratio was 86.7% in 2005.)

See the Remodeling Website for the full list of projects and the ROI of each. You’ll also find how-to articles, products and  lots of other resources. There are good articles about aging in place and renovations that might be necessary, as well as simple solutions that might not require a full renovation. Universal Design is a newer topic in the Cost Vs. Value Study, as more boomers are choosing to age in place.

Minor renovations usually net a higher ROI than major renovations. The improvements that got close to 100% return on investment were:

  • Attic Insulation (fiberglass) 85% – 123%
  • Garage Door Replacement 89% – 102%
  • Minor Kitchen Remodel 80%
  • Manufactured Stone Veneer 81 – 92%
  • Steel Entry Door Replacement 84%
  • Siding Replacement 82%

The improvements that got the lowest ROI:

  • Bathroom Addition: 42% – 44%
  • Master Bedroom Addition: 52% – 54%
  • Backyard Patio: 53%
  • Backup Power Generator: 46.5%
  • Major Kitchen Remodel: 54%

Remodeling Projects For the Home – Return on Investment

As you can easily see by this report not all home improvement ROI is equal. In most, but not all cases higher end improvements got a lower return on investment than improvements in the mid-range cost.

Some remodeling projects get a better ROI than others, and some projects help sell a home more than others, regardless of the ROI. Some home improvements are absolutely necessary to get the highest sale price for a home. How does a homeowner navigate the home improvement waters?

Considerations When Renovating

While the cost vs. payback factor is important in planning renovation projects, it shouldn’t be the only consideration. For homeowners who are renovating to be able to age in place or who need to care for an elderly family member, or remodel for a home office so they don’t have to commute, other issues may be more important than return on investment. For some projects, the satisfaction and quality of life while living in a house that you love is the main priority.

Homeowners should always consider the trends in their market, in their neighborhood and in their comparative price range. Renovating far above the standard of homes in your area may produce features in your that you absolutely love, but you should understand that you won’t likely get the return on investment that would make the renovations the best financial decision. In that case, make sure that you are doing renovations only for your own enjoyment.

Avoid Over Improvement

After 25 years of working with home sellers in the central Maryland area, it is always a challenge to interact with homeowners  who have spent too much money on the wrong renovations and home improvements, expecting to get their money back on those expenditures when they sell their home.

If you are planning a renovation, do yourself a favor and consult your local real estate professional before you take the plunge. Find out what today’s buyers are looking for, as well as what home improvements are trending in your market. You’ll save yourself some money and you’ll be confident that you are investing wisely. Getting the highest home improvement ROI is a wise move.

Find Out What Your Maryland Home is Worth


Frederick Real Estate Market Trends

Frederick Real Estate Market Trends

Frederick County Real Estate Market Update

Provided by The Highland Group  ~ February 2017

Real Estate activity in Frederick County is picking up and the spring market is here. Here is a snapshot of Frederick County real estate statistics in February:

Real Estate Trends in Frederick Md

Average Home Sales Price:  $286,295 , very close to last year by -1%.

  • Average Single-Family Sales Price:  $353,484, up 4% from last year at this time.
  • Average Attached Home Sales Price:  $214,349, up 2% from last year.
  • 121 single-family homes sold,  14% less
  • 113 townhomes and condos sold, 23% More! 
  • A total of 234 homes sold in February, almost the same as last year, at 233.

Median Home Sales Price:   $251,250 compared to $265,000 last year: down 5%. More homes sold in the lower price ranges, as evidenced by the number of attached homes compared to the number of single-family homes.

Average Days on Market (DOM) the time it takes to get a contract: 77 days, down 21% from last year (97). This is a direct reflection of Demand in our market.

Number of Homes Sold:  There were 383 new pendings (homes that went under contract) 9% more than last February. The demand is picking up as we head into the spring market.

Total Listings in Frederick Md: 785, down 23% from 1,021 last year. The inventory is a very low number for Frederick County. We’re in a seller’s market until the inventory increases, with a 2 month absorption rate.

** If demand is still strong for the season and inventory is decreasing, this is a good time to sell!

Sellers got 96% of list price on average, compared to 95% at this time last year. The fact that this number is higher than last year shows that the demand is strong, even though its winter, when the market usually slows down.

Keep in mind: In some price ranges, in some areas of the county, there is naturally a higher demand and the market is more competitive for buyers. Some neighborhoods, like Urbana, Middletown and several in the city of Frederick, are in high demand, and have lower absorption rates.  Some smaller communities on the outskirts of Frederick County, Myersville, Thurmont, Woodsboro, are typically less in demand and homes take a little longer to sell…but not much longer.

When we drill down to the neighborhood level, there are differences in demand as well. All reasons to consult an to find out supply and demand in your area.

See Homes for Sale in Frederick Maryland

What’s Notable:

  • The spring market is here. Mortgage applications are up, signifying larger numbers of buyers entering the market soon. If you’ve been waiting for the right market to sell, this could be it. High demand and low inventory.
  • With less than 800 homes listed on the market, and note that 222 are new construction, that really means that there are about 550 resale homes.

What’s My Frederick Home Worth?

  • Interest rates have been hovering just above 4% recently, but that’s still incredibly low! See today’s rates.
  • We will expect multiple offers on the homes that are in great condition and priced at market… and this will continue to put upward pressure on home prices. Homes that are priced well and in the best condition, and in areas of demand, are sold in weeks or even days.
  • Cash deals were 13% of sales. As appreciation is expected, we’re still seeing Investors and flippers in the Frederick market. 38% of loans were with Conventional financing, outpacing FHA loans, which were 30%. 8% were VA.
  • **The majority of home sales took place in the $200,000 to $300,000 price range. 33%. Interesting note: The majority of listings are in the $300,000 to $400,000 price range, 26% where 19% of homes sold.

February 2017 Market Statistics provided by MRIS (Mid-Atlantic Regional Information System)

*MRIS – Metropolitan Regional Information System – These statistics are not guaranteed but are considered accurate. Frederick County Real Estate Market Trends for February 2017.

Contact Chris Highland to see homes for sale in Frederick Md.




Real Estate Terminology – What is Absorption Rate?

Real Estate Terminology – What is Absorption Rate?

What is “Absorption Rate”?

The Absorption rate is roughly how long it will take the current homes on the market to sell. It’s an estimate, based on  the current number of listings and current sales. Because those two factors fluctuate from month to month,  absorption rate is a rough estimate. It’s an average of how many homes sell each month, based on a 6-month calculation, because anything less than 6 months is too small a sample, and anything greater than 6 months wouldn’t give an accurate picture of what’s going on with values in an area.

If I get the total number of homes that have sold for the last 6 months in an area, say a Frederick zip code or a Frederick County town or, better yet, a neighborhood, and then divide by 6, I’ve got an absorption rateAverage number of homes that sell each month.

If I take the total inventory, or how many homes are on the market in a given area, and divide by the absorption rate, I get the months of inventory, or how long it will take to sell all of the homes in the chosen area (if no more homes were listed).

Why is Absorption and Months of Inventory important?

These numbers are important to buyers as well as sellers. An absorption rate of about four to six months indicates a balanced real estate market.   Balanced means a market that does not favor the buyer or the seller.  An absorption rate of less than four months indicates a seller’s market.   An absorption rate of more than 6 months indicates a buyer’s market.

Home Sellers

To a seller, these numbers tell them whether their home is positioned correctly in the market. If they need to sell in 3 months and the absorption rate in their neighborhood is 6 months, then they will need to price their home to sell, without taking months to adjust the price as they test the market.

The absorption rate tells the seller what the normal time on market is for their current market. If their home doesn’t sell in the time that the average comparable home sells, then they know that something is amiss. They will know how accurate, or inaccurate, their pricing is when they find themselves still on the market after the average time for their area.

Home Buyers

For a buyer, the opposite can be discerned. If they see a home that has been on the market for longer than the average time for that neighborhood or community, they will think either two thoughts: 1) something is wrong with the house, or 2) the house is overpriced.  These homes often receive low-ball offers because of these perceptions.

Understanding real estate terminology, absorption rate for one, helps to navigate the market, negotiate and have proper expectations. Both buyers and sellers can learn how to get the best possible outcome in their market by understanding local market trends.

Contact us for a consultation to find out how much your home is worth in today’s Frederick Real Estate Market.

The Highland Group
Chris & Karen Highland 
eXp Realty – 410-777-5714

Taking Care of Basement Moisture Problems – Leaky Pipes

Taking Care of Basement Moisture Problems – Leaky Pipes

Basement Moisture Problems

When is it a leaking pipe and when is it condensation? Generally speaking, if a pipe leaks constantly, there is probably a small fissure or defect in the pipe itself, causing moisture to escape.

If a pipe leaks intermittently or stops leaking during dry weather, it is probably a condensation problem. Ground moisture can force its way through almost any basement floor or wall, and into the air. Once the moisture is circulating in the air, it will eventually reform as water droplets, clinging to exposed pipes.

One of the easiest ways to prevent condensation on pipes is to prevent moist air from reaching them in the first place. This can be done by wrapping pipes in plastic foam pipe wrap. This foam can come in sheets or as ready-to-use aerosol spray that dries to a hard, white coating that can be painted or primed. Insulating hot water pipes is also a good idea to help prevent heat loss and save on energy.

Once the plastic foam has been installed, seams need to be wrapped with duct tape. It is usually best to wrap all exposed pipes to eliminate this source of moisture collection. If wrapping all pipes is too extensive a project, the best advice is to wrap as much surface area as possible. The less piping that is exposed to the ari,he less condensation that will occur.

In the past, homeowners used fiberglass pipe wrap to deal with dampness. Unfortunately, fiberglass material is not waterproof, and actually absorbs water. Over time it can harbor mold and mildew. Adding a plastic vapor barrier to fiberglass wrap is a cumbersome and time-consuming process, it is most effective to use the plastic foam products.

While moisture may be greatly reduced, it is almost impossible to eliminate it entirely from the basement. To lessen humidity, and decrease damage to furniture, stored items and air quality, a dehumidifier can help. Basement moisture problems don’t have to be significant to require action, so staying on top of issues will keep a homeowner from facing larger problems down the road.

Thanks for the guest post from:

David Goldberg –  Home Inspector

fax:  301-774-4554 
Reliable Home Services, Inc.

PO Box 5159
Laytonsville, MD 20882
ASHI Member #101584
MD License #29322

*          *          *          *          *
If You have a remodeling project in mind,  for a list of professionals we’re proud to recommend.


Four Reasons Your Home is NOT Selling

Four Reasons Your Home is NOT Selling

Homes Don’t Sell for A Reason

The statistics say it’s taking an average of 60 days to sell a house in Frederick County. When a house is on the market for much longer than the average time of comparable homes, there are reasons the home is not selling. Many sellers don’t realize they can hurt their chances of selling their home by doing one or any of these things:

1. Overpricing their home.  When the number of homes on the market is at an all-time high, about twice as much as a normal Frederick Market, sellers need to realize that buyers have the luxury of choice.  They will choose the best house for the least money. Normal market forces make that fact more of a reality than ever.Pricing Your home right from the start

When the inventory is low, like it has been for a while, homes that are priced right and in their best condition sell in a matter of days or weeks. When a house lingers on the market in a hot seller’s market, you can be pretty sure that the asking price is not right for the house. The home needs to be positioned correctly on the market to attract the attention of likely buyers. Remember, most buyers are trusting the advice of their buyer’s agent, who more than likely are educating them on the on the market value of each home they see.

2.  Not keeping a house in the best Condition is a sure-fire way for a seller to send a buyer down the street.  Even when competition is high in the real estate market, buyers are viewing homes in a certain price range, comparing them all as they shop. Buyers choose the house in the best condition at the best price. The only way to position the house in the market when the condition is less than other like homes is to adjust the price.

3. One of the best ways to keep your house from being sold is to keep it from being shown.  Being unavailable or making it hard to show is not a good strategy.  If a buyer’s agent has difficulty getting the OK to show your house, they will move on to the other houses on their list, and chances are, they won’t come back.  The best way to sell a home is to be very flexible on showing times and to temporarily do as much as possible to arrange your life around the goal of selling your home. And keep your cell phone in your pocket. The sooner you sell your home, the sooner your life gets back to normal.

real estate listings4. Lack of proper Marketing is another way to keep your home from selling.  By proper marketing, I mean modern internet marketing, where over 92% of buyers are looking.  Sellers need to make sure their listing agent is advertising on the many real estate websites that are on the web. Internet marketing demands professional photos, high-definition video, and a detail-rich description.

By following these tips and using an experienced local real estate agent, you will have success in selling your home in the least amount of time for the best price for your market.  Your house can be one of the homes that sell in 30 days or less, instead of the house that lingers on the market.

Contact Chris Highland for our High-Touch High-Tech Listing Plan. 


The Highland Group
Chris & Karen Highland
eXp Realty 

Understanding Your FICO Score

Understanding Your FICO Score

In today’s environment of tighter lending standards, it’s more important than ever to handle money and credit intelligently and carefully.understanding your FICO Score Although credit scores are not the only determining factor in deciding the credit-worthiness of a borrower, they are an important part of the process. Good credit scores can mean a lower interest rate, which can save you money on your monthly mortgage. Having a good score also gives you many more options in loan products when you start the home buying process.

As well as mortgages, having a good credit score benefits you and several other ways:

  • Auto Financing is better
  • Renting is easier
  • Job Prospects… yes, potential employers can check your credit score
  • Obtaining other Loans
  • Major purchases, like appliances or furniture

What is a FICO Score?

A credit score, simply put, asks and answers the basic question of whether or not a borrower pays their bills. It helps lenders determine if a borrower is likely to pose any type of credit risk.

A FICO® score [FICO® – Fair Issac Corporation]  is a summary of an individual’s credit history from the three main credit bureaus:  Equifax, Experian and TransUnion. Each bureau collects data differently, so an average of all three is considered a fair assessment of credit-worthiness. FICO® Scores are calculated based solely on information in consumer credit reports maintained at the credit reporting agencies.

There are other credit-reporting companies, but FICO® is the most widely used, as 90% of top lenders use FICO® Scores to determine whether an individual is a good credit risk.

Understanding Your FICO Score

In the US FICO® scores range from 300 to 850. The average score is around 660 to 670, and is considered good credit. 749 and up qualifies as excellent credit and scores below 620 are seen as less-than good credit.

What Makes Up a Credit Score?

  • 35%:  Payment History, including on time pays and delinquencies; more weight is placed on recent payment history.
  • 30%:  Remaining debt capacity
  • 15%:  Length of credit history
  • 10%:  Accumulation of debt in last 12 to 18 months; number of inquiries; opening dates
  • 10%:  Mix of Credit:
    —  Installment, revolving and open accounts
    —  Number of finance company loans; the more the lower the score

A logical first step in home buying is to check your credit report and see where you stand. If your credit needs a little primping, most lenders have programs to help you work on your credit. Sometimes, in cases where the damage is great, a hopeful borrower might want to work with a credit specialist. [we know a great one!]

Keeping good credit is valuable even if you aren’t in the market to buy a home at the moment. Your interest rates on a car or other installment loan, as well as on credit cards will be lower with a good credit score, saving more of your hard-earned dollars every month.

Credit Scores and Mortgages

The most influential determinant of your ability to get a mortgage is your credit score. The higher the score, the more mortage options are available and the lower the interest rate, generally. A credit score of 740 or higher qualifies for the best interest rates from most lenders. Although you often read that you can get a mortgage with a score of 620, it’s very difficult. The bottom credit score for most mortgages is 640. It’s always wise to get your credit score to a minimum of 660, so that if any last-minute dings happen to your score, you’re still well above the minimum.

Between a minimum 640 and a healthy 740, the rates can vary as much as 1 1/2 points. In today’s mortgage rate climate that can be the difference between 4% and 5.5%. Consider the difference in monthly payments on a $200,000 home:

  • 4% rate = $954.83
  • 5% rate = $1073.64
  • 5 1/2% rate = $1,136

By taking the time to build a good credit score, you can end up saving as much as $181 each month. Over the 30 years of the loan that adds up to $65,160.

Extra Credit

  • – Consumer credit reporting companies are allowed, under FAIR Isaac laws, to sell name lists to other companies that, in turn, make offers of credit or insurance. These “Firm Offers” aren’t initiated by you, the consumer. This website is the place where you can opt-out from firm offers, as well as opt-in.
  • Federal law allows you to get a free copy of your credit report every 12 months from each credit reporting company. One place to get your free reports is Credit counselors advise consumers to get one free report every 4 months from one credit reporting company. With identity theft on the rise, it’s always good to check for errors.

Contact Us for a list of Preferred Frederick Lenders.

Chris Highland
eXp Realty

301-401-5519 Direct
410-777-5714 Broker

Should I Get A 15 Year Or 30 Year Mortgage?

Should I Get A 15 Year Or 30 Year Mortgage?

Should I Get A 15 Year or 30 Year Mortgage?

This past year has continued to be a time of new lows in mortgage rates; the 30-year fixed-rate mortgage averaged below 4% for last year (2016), setting a new all-time record lows. The 15-year fixed rate also averaged at historic lows, under 3%. With these super low rates, should you consider the difference in a 15-year or 30-year mortgage?

In 2017, rates are projected to go toward the mid- to upper-4% range. Even so, these are still super low rates historically.

There are many choices in mortgage products today, not just the 30-year mortgage and a 15-year mortgage. When rates are so low, many buyers can take a second look at something other than the typical 30-year mortgage. Many buyers, after seeing the list of mortgage rates, wonder, should I get a 15 year or 30 year mortgage? Good Question.

What is the difference between the 15-year mortgage and the 30-year mortgage?

Besides the obvious pay-off being half the number of years, the difference between the two is mostly experienced by home owners in the monthly mortgage payment. An example of a $300,000 home:

Sample Scenario of two $300,000 mortgages:

$300,000 Home Monthly Payment Life of Loan
Total Interest Paid
30-year-fixed mortgage = 3.5%   $1,347    $484,968   $184,968
15-year-fixed mortgage = 2.8%    $2,043    $367,741     $67,741
% Difference 48% higher payment 24%  savings  63% savings

You can use this handy mortgage calculator from Bankrate to see the difference in the two mortgage products. You can see that this 30-year fixed mortgage has the advantage of more reasonable payments, while the 15-year fixed mortgage is geared towards long-term savings overall.

The choice between a 15-year or 30-year mortgage comes down to your comfortable monthly tolerances. Some people tell me they don’t want to be “house poor”, or to say they don’t want to have only a little left at the end of the month after paying their mortgage. The 30-year fixed mortgage is the tool that will give you the lowest monthly payment possible by stretching out those payments over 30 years. The cost is more money payed to interest over those 30 years.

With a 15-year mortgage you are paying more towards the balance each month than you would with a 30-year mortgage. Some people live comfortably with higher mortgage payments and less expendable income. Some people buy well below the maximum of what they can afford, using a 15-year mortgage. There is an advantage to having your mortgage paid off in 15 years. The caveat to this payment arrangement is that your tax write-off will be less with a lower amount going toward interest each month.

It’s a lifestyle choice. It’s a subjective choice.

Paying Off Other Things

Part of the decision of which mortgage to choose is the consideration of other obligations you may have. If you have other debts with higher interest rates, you may want to consider paying those first, saving money in interest and payments the long run. In our example, the $700 extra you’d have each month by choosing a 30-year mortgage could be used to pay down debt.

Investing Elsewhere

Another consideration is the choice of investing that $700. Could you invest somewhere with a greater return than in your home? Using this IRA Investment Calculator from Bankrate, you would have $147,884 in your IRA after investing the maximum $5,500 a year for 15 years. (Subtract the $67,000 you might have saved if you had a 15-year mortgage and you’re still ahead.)

***This is where our DISCLAIMER goes…we are not financial advisers, we are REALTORS. We’re just raising questions for you to ask your accountant or financial adviser.***

Colin Robertson writes a very informative blog, The Truth About Mortgage, with 6+ years of news about the mortgage industry. He has some great charts to compare the payments with different interest rates. Use his handy charts to compare rates: [click to enlarge]

15 year mortgage rates

30 year fixed mortgage rates

“Should I Get A 15 Year Or 30 Year Mortgage?” It’s nice knowing you have choices, right? Knowing the numbers helps in making the choice.

Thanks to The Truth About Mortgage for these excellent interest rate charts! Be sure to read Colin Robertson’s blog for great information about mortgages.

Colin makes some other points that make sense when you consider them, but might not think about at first:

  • It is also possible to choose a rate for a 15-year mortgage.
  • The lower the interest rate, the smaller the difference in monthly payment. As rates move higher, the difference in payment becomes more substantial.
  • Higher mortgage rates are more damaging to larger loan amounts. If you look at the 30-year chart, the payment on a $400,000 loan amount at 3.50% is cheaper than the payment on a $300,000 loan at 6%.
  • Remember, this chart shows principal and interest only. There are often other items to consider, like Mortgage Insurance, property taxes and homeowners insurance. HOA fees and condo fees can also add to the monthly amount you need to consider.

Check out Colin’s blog for more great information. Another good read for those who want to dive deeper:  learn how are mortgages calculated.

Thanks, Colin, for these useful charts!

SEARCH for Homes in Central Maryland

The Highland  Group
Chris & Karen Highland   cell   301-401-5119
eXp Realty  410-777-5714

Homeownership, Buying and Selling Frederick MD: What to Expect in 2017

Homeownership, Buying and Selling Frederick MD: What to Expect in 2017

Central Maryland Real Estate Predictions for 2017

It’s that time of year again…and the Highland’s are getting out the crystal ball. I’ll be honest, when the market is in positive territory, we love to share our opinions, without feeling like they’re wild guesses. When there’s a lot of negative news, we’re pretty quiet. In matters of real estate, what can we expect in 2017?


  • Homeowners can expect more modest gains in home values.
  • We expect demand to continue throughout the winter and into spring in 2017.
  • Interest rates are predicted to climb into mid- and upper-4’s. But…we’ll see…
  • We expect overall increases in sales, but in certain demographics and neighborhoods, there will be a robust real estate market.
  • New home building is back.

Increase in Home Values

In Central Maryland, we’ve seen a healthy recovery over the last 4 years. Most of the gains were seen in 2013, with an increase in the average home price of about 11% throughout the year. In 2014, average sales price increased roughly 1%, and in 2015 it was just over 1%. In 2016 we saw a brisk pace of sales with a less than ideal inventory, so we saw a 2% increase in average sales price over the year. See the chart for comparison:


Median sales price, which is often a better signal of what the market is doing, rose 2.5% from $265,700 in 2015, to $272,300 in 2016.


In 2016, average sales prices for single-family homes increased a 2%, from $341,300 to $349,300

while townhouse sales price increased 3% on average, from $222,300 to 228,500.


In 2016 we saw the demand increase 11%, from 3701 units in 2015 to 4093 units in 2016. At the same time, the average monthly inventory decreased by about 9%, shifting the market closer to a seller’s market, but still very balanced with a 4-month inventory throughout most of the year.


With a continued demand and an increase in inventory, we see no reason why home values won’t increase in 2017. The reason why we haven’t seen values skyrocket is two-fold:

  • The time on market increased in 2015 to 72 days (from listing to contract). In 2016 it was a very similar 73 days. Demand increased, listings decreased, but buyers still took their time.

The Highland’s take on this: The urgency is gone. 

  • We’ve been hearing that the interest rates are going up for two years now, but it hasn’t happened (significantly). We got a recent bump in rates, but then they just came back down. Buyers are aware of that. The frenzy to take advantage of low rates has dissipated. (The Fed raised rates at the end of 2016.)
  • Due to these factors, average home prices are increasing very modestly. Again, no urgency to take advantage of low prices and rates. Yet.

Real Estate Demand in 2016

As the economy strengthens, more jobs, 2.2 million in 2016, according to Bureau of Labor and Statistics, increasing consumer confidence, especially in the Washington D.C. Metro area, demand should continue at the pace we’ve been seeing for a few years.

Additional Reading:  These 5 Trends Will Shape the Housing Market in 2017

New households are forming, rents are rising (as much as 8% in 2016!), mortgage rates are low, and conditions are good for first-time buyers. In 2016, the majority of homes sold in Central Maryland were in the $200,000 to $300,000 range…many were first-time buyers.


Find out: What’s My Home Worth?  Get an online valuation. We’re also happy to do a custom Comparative Market Analysis.


Real Estate Inventory in 2016

As more homeowners gain appreciation, we’ll see more homes on the market. There is a large number of homeowners waiting for the return of equity so they can move on with their lives….those we’re calling “right-sizers“. This includes move-up buyers, downsizers, retirees, and those who desire to move to another location. As finances get healthier, we even expect more homeowners able to purchase second homes than we’ve seen in years.

According to Core Logic, Negative equity in U.S. homes (the share of mortgaged homeowners that are underwater, owing more on their home than it is worth) has steadily declined since a high of 31.4% in the beginning of 2012, to the most recent statistic of 6.3%, in the third quarter of 2016. Down from 13% one year ago.

New Home Sales

Frederick Real EstateBuilders have stopped avoiding the lower priced entry-level homes. The median new home price has come down over the last year, which shows that builders are responding with more affordable priced homes.  New homes jumped 16% year-over-year in 2016 nationwide.

In Frederick Md, we have many new construction projects underway.


Interest Rate Prognostications

It used to be easier for the economic experts to forecast what interest rates will be. With the increasing global economy, it’s gotten much more complicated to predict what will affect interest rates and what the Fed will do, and how banks and lenders will respond. Most predictions I’ve read are calling for 5% by the end of 2017. We’ll see.

Who’s Buying and Selling?

Millennials are expected to make up a larger portion of homebuyers this year. In 2016 they started to step into the housing market, and are expected to continue in the same pace throughout 2017.

Boomerang Buyers are back. During the housing crisis, more than 7 million homeowners suffered a foreclosure or endured a short sale. Many have healed financially and are ready to enter the homebuying market again. We’ve helped a few get back into homeownership this year. Typically, it takes an average 7 years to recover financially and credit-wise. Since the problems began in 2007, boomerang buyers are in recovery.

Right-Sizers, …basically, anyone who has been waiting for enough equity to move on, whether it be up, down or away. With negative equity down to 6%, we think many homeowners will be able to sell.

What Are they Buying and Selling?

We’ve seen a bifurcated market in Frederick Maryland for several years. Homes priced under $350,000 are appreciating, particularly townhouses. Homes priced over $500,000 are not appreciating much, and in most neighborhoods are taking longer to sell. Luxury homes, above $750,000 are beginning to sell again. But price appreciation is something we’re not seeing yet.Villages of Urbana Neighborhood

We expect a little more trickle up in the real estate market this year, as we will inevitably see more move-up buyers. The exception to most of these market trends is Urbana. The Urbana real estate market is and has been much more robust than most of Frederick County. The time on market is measured in days, while it’s measured in months in many outlying communities, like Myersville, Thurmont and Walkersville.


Find out: What’s My Home Worth?  Get an online valuation. We’re also happy to do a custom Comparative Market Analysis.


2016 Real Estate Market Trends

One of the national trends that we are seeing here in Maryland is the move to the city. Downtown Frederick is once again seeing increased building and an influx of home buyers.

  • Maxwell Square is complete, with the last row to be built. After 10 years of a stall, and a new builder taking over, the luxury townhouse-condominiums on 5th Street sold between $375,000 and $450,000.
  • Several infill homes have been built in 2015, from the Hemby homes on 5th Street, to several one-off’s here and there. We will more than likely see more in the coming year, as well as more renovations on older downtown Frederick homes.
  • North Pointe is in the final stages, with six homesites left. (as I type this…)
  • Just 4 blocks from downtown Frederick, the Eastchurch development on East Church Street is well underway. KB Home, Richmond American Homes and Wormald Homes are building condos, towns and single-family homes.

Another trend is the Demand for Amenity-rich suburbs. As some buyers get priced out of city centers, they’re looking at suburban housing but in a different light than in the past. The neighborhood “town center” has become a big demand. We see that in the newer developments in Frederick: Tuscarora Creek, Eastchurch, and Market Square. The Worman’s Mill town center is next on the agenda, finally coming to fruition after about 20 years.

Also called “Surban” communities—suburban neighborhoods offering the most desired features of urban and suburban living—will attract the most households in the United States over the next ten years, according to a demographic study by the Urban Land Institute.

Real Estate Trends that Never Go Out

No matter whether we find ourselves in a buyer’s or seller’s market, or no matter what demographic we are reaching, some things remain constant:

Sellers – If you want top dollar for your home, it must be in the best condition for the comparable homes in your market, and it must be priced right. These things never change.

Right-Sizers – Regardless of the market, deciding whether it’s the right time for you is a life-style choice. The right time to sell and down-size, up-size or move away, is when it makes sense to you…and when you have enough equity to do so.

First-Time Buyers – Interest rates are the number one item that affects affordability, over price of home. See this article on the affect of interest rates. Even so, with all the changes in market dynamics, there are basic questions you need to ask yourself to determine if this is the right time for you: Job Security, good credit, a plan to stay 5-7 years, a bit of money for a down payment, and the ability and desire to own your own home. Read more: Six Considerations Before you Buy Your First Home


Homeownership, Buying and Selling: What to Expect in 2017

Sellers, if you’ve been waiting for home prices to recover, 2017 may be a good year for you to be able to sell. The demand will be there, and even though the competition will also be present, if your home is in good condition and priced at market, you should have success. It promises to be a good year for sellers.

Buyers, if you’ve been on the fence, 2017 should prove to be a good year to buy. There will be many homes to choose from, interest rates will more than likely remain in the low-to mid- 4% range, still historically low, and home prices have been appreciating slowly, off to a modest increase. It promises to be a good year for buyers.

Here’s to a prosperous and happy 2017 to our readers and friends! Contact Chris Highland if you are considering a sale or purchase in 2017.


Find out: What’s My Home Worth?  Get an online valuation. We’re also happy to do a custom Comparative Market Analysis.

Six Things to Consider Before You Buy Your First Home

Six Things to Consider Before You Buy Your First Home

Buying a home is probably one of the biggest purchases most people ever make. It is certainly an important part of a life-long financial plan. If you’re thinking about becoming a homeowner, there are at least six things to consider before you buy your first home:

1. Your creditworthiness

Is your credit healthy? In today’s mortgage environment solid lenders are interested in your credit history.  If you have more than a couple of blemishes Six Things to Consider Before you buy your first homeon your report, some lenders may still provide you with a loan, but you may just have to pay a higher interest rate and fees.

You can request a free copy of your credit report from each of three major credit reporting agencies – Equifax, Experian, and TransUnion – once each year at or call toll-free 1-877-322-8228. You are entitled to one free credit report per year.

If you have low scores or very little credit, you can work with a credit specialist to enhance your scores to the level that will help you not only be able to apply for a mortgage, but get better interest rates. [we have recommendations for credit counselors]

2. Determine How Much You Can Afford

To determine how much home you can afford, you can to online and use a “home affordability” calculator, but the results will only be a general figure which may or may not be very accurate. Good calculators will give you a range of what you may qualify for. Then you’ll need to call a lender to get pre-qualified and get a more accurate loan limit. This will also give you an estimate of what the monthly payment will be. Contact us for a list of preferred lenders.

The advice that buyers get ranges, some advise not to borrow as much as you qualify for because it’s wiser not to stretch your financial boundaries. The other school of thought says you should stretch to buy as much home as you can afford because with regular pay raises and increased earning potential, the big payment today will seem like less of a payment tomorrow.

This is a decision only you can make. Are you in a position where you expect to make more money soon? Would you rather be conservative and fairly certain that you can make your payment without stretching financially? Make sure that whatever you do, you are comfortable with it. Consult a financial adviser to see how home ownership fits your long-range goals.

3. How long you plan to live in the home

If you buy a home and get a job transfer or decide to move after only a short time, you’ll probably end up paying money in order to sell it. The value of your home may not have appreciated enough to cover the costs that you paid to buy the home and the costs that it would take you to sell your home.

The length of time that it will take to cover those costs depends on various economic factors in the area of the home. In a normal market, most parts of the country have an average of 3-5% appreciation per year. In this case, you should plan to stay in your home at least 5-7 years to cover buying and selling costs. If the area you buy your home in experiences an economic upturn, the length of the time to cover these costs could be shortened, but the opposite is also true.

4.  How long the home will meet your needs

What features do you want in a home to satisfy your lifestyle now? What about five years from now? Depending on how long you plan to stay in your home, you’ll need to make sure that the home has the amenities that you’ll need. For example, a two-bedroom home may be perfect for a young couple with no children. If they start a family, they could quickly outgrow the space. Therefore, they should consider a home with room to grow. Could the basement be turned into a den and extra bedrooms? Could the attic be turned into a master suite? Will you have money to do renovations, to the best of your knowledge? Having an idea of what you’ll need will help you find a home that will satisfy your needs for several years.

5.  Where the money for the transaction will come from

Most homebuyers will need some money for a down payment and closing costs, unless using a VA loan, which requires no contribution from the buyer. With today’s range of loan options, having a lot of money saved for a down payment is not always necessary.  FHA loans require a 3.5% down payment, making them a top choice for first-time buyers. Some loans allow contributions from parents, some have lender grants attached. Your lender should have various options for you to consider.

In some cases, seller contributions are allowable. If that is necessary, make sure your buyer’s agent knows that upfront, so they can do their best negotiating for you. [contact us for buyer representation]

6.  The ongoing costs of home ownership

Maintenance, improvements, property taxes and home insurance are all costs that are added to a monthly house payment. If you buy a condominium, you’ll have a condo fee. If you buy in certain neighborhoods, a monthly homeowners’ association (HOA) fee might be required. If these additional costs are a concern, you can choose neighborhoods without these fees.

Make sure to do your research. Your lender and your real estate agent should be good resources for the information you need to make the best decisions.

Consult A Financial Planner

You may want to consult with an accountant or financial planner to help you decide how a home purchase fits into your overall financial goals. As Realtors, we are not financial advisers, nor is any content on our blog to be considered financial advice.

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Chris Highland
eXp Realty