All Real Estate is Local
After reading some generic articles on several national real estate websites, with “Top 10 Home Buyer/Seller Tips”… I am often inspired to write my own article about how much of that great advice should be ignored…or at least filtered through a local real estate expert. There is no such thing as a “National Real Estate Market”. All real estate is local, and local real estate trends, business development and economic news are what matter.
To clarify: national real estate trends don’t have much to do with why a Frederick homeowner should or shouldn’t list their home for sale, or what they should consider for the list price. And, likewise, they don’t have much to do with what local buyers should consider offering on a home. All Real Estate is Local.
Real Estate is A Local Industry
The process of buying and selling real estate, as well as pricing and marketing, are very local. It doesn’t matter to a home buyer or sellers in Frederick Maryland what the market is doing in California or New York. For One Main Reason: Demand
The real estate market hinges on supply and demand. In any local market, those are different. They depend on many issues, like the job market and overall economic development, local and state taxes, and that overused but meaningful phrase: location, location, location.
Real Estate Markets are Subject to the Local Economy
- Employment can be booming in some communities, while not in others.
- Supply and Demand still determine the local market, even the micro-local market. When a local hospital was expanding, they were particularly hiring a large number of medical technicians. The neighboring townhouse subdivision experienced a mini-boom that year. Prices were increasing and homes were selling in record time, while a similar development across town was stagnant. This is a perfect example of a niche market experiencing a market trend.
- Even within the City of Frederick, there are neighborhoods which are in high demand. They always seem to have more sales, less time on market and higher home prices.
- A neighborhood which was built primarily between 2003 and 2005 experienced the opposite for a number of years. Many of those homes were financed with adjustable ARMs and, unfortunately, a number of them stared defaulting in 2007. From 2007 to 2012 there were a large number of short sales and foreclosures in that neighborhood. This cause the values to go down, making it very hard to sell in that neighborhood.
- The availability of a nuanced loan for a nuanced property can affect that market niche. If there is no loan product available for the five-acre farm, which doesn’t conform to traditional loan products, that home will be a tough sell, no matter how much it is worth. [Local Banks are increasingly bigger players, with incentives and programs that larger banks often don’t offer. Don’t rule out small local banks for a mortgage source.]
- A few years ago, a large employer left Frederick County and moved to Virginia, taking a large number of higher-paying jobs. All those employees put their $500,000 and up homes on the market. The problem was, there were no new higher earning jobs coming to Frederick. This created a larger inventory of homes in that price range with a decreased demand. We had bifurcated market, where homes under $350,000 were appreciating, and homes over $500,000 were depreciating.
The Local Frederick Market
In a recent survey by Realtor.com, Realtors ® were asked how their current market compared to last summer’s market. 41% said the market was better, 13% said the market was about the same, 27% said it was a little worse, and 20% said their real estate market was much worse.
We’re having a mini-boom in Frederick County. First-time buyers are finding super deals, as well as investors. Prices are at 2003-04 levels, interest rates are insanely low, and affordability is at an all-time high. But the linchpin is demand, which is steady and healthy.
Take National News with A Grain of Salt
So, to some extent, you have to take national news about real estate with a grain of salt. Remember that all real estate is local. Find a good local Realtor® and ask them about the local market trends. That’s the only way to really know.
With today’s historically low interest rates we’re seeing the most affordable real estate market in decades. The present market is a great opportunity to buy Frederick Real Estate.
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