Poor Hagerstown economy hurts home prices
During the housing and general economic boom of circa 2007, Hagerstown and even Cumberland gained residents who commuted to Frederick, Washington and even Baltimore. Houses were more affordable the farther west you got. People chose to spend lots of time in the car in return for more square footage at home.
I wonder how Hagerstown commuter economy is doing these days. As Gus Sentementes reports in today's newspaper, Hagerstown has one of the highest unemployment rates in the state. I'm guessing the commuter economy is intact. Most of the government-dependent jobs that were drawing people from the western part of the state are still there; the government sector has been hit much less severely than the private sector.
But in any event Hagerstown property values have been badly hit. Unlike home prices in metro Washington and Baltimore, they show no sign of recovery. From the charts below you can see that Zillow shows a peak-to-trough decline of 37 percent for a couple Hagerstown zip codes, and no uptick. A similar chart for Columbia, which I can't get to embed, shows a 20 percent drop, bottoming out in early 2009, and an upsurge since then. At about 5 percent Columbia's unemployment rate is half Hagerstown's.
Comments
About a year ago I tried to move to Hagerstown. I’ve got a state job so finding work wasn’t the problem. I put several contracts on several homes. I was either outbid or the home was over priced. In my final attempt we put a contract on a home, in the neighborhood I really wanted (and thought I couldn’t afford), on a bank owned home. The bank wanted nearly $20 K more than we offered, but the home needed work. The $20 K we saved would go towards that. The bank home had been on the market for 3 months. The bank countered only $2,500 under asking!!! That put is in a position to either take a home that needed work and we couldn’t afford to fix, or walk. Money doesn’t grow on trees so we couldn’t do both. The problem ended up being the property tax! I was shocked at how much that added to the mortgage! Coming from Baltimore City I was not going to pay more for my property tax! Opening new lines of credit wasn’t an option. In the end, we walked and the home sat for another 3 months. In the end the bank took $10 K less than we offered!
Another home I loved! Right in our price range a bit more, but brand new so little chance it would need major work for a few years. We were ready to put an offer, but missed by only a few hours. Though the home kept coming up in searches, the agent insisted that a contract had been accepted and the sale was moving along. The sale did fall through and no one ever contacted us to see if we were interested after contacting them more than once. Again the taxes were high, but in a home that didn’t need work we could suck it up for a few years.
In the end I came to the Eastern Shore! I got a brand new home for a great price. It’s very rural, but I think we would all agree that the development in coming.
For me, the difference seemed to be the taxes! I would have happily taken a home in Hagerstown, but was taxed out. Not to mention that we didn’t seem to get taken very seriously. I love Hagerstown, I was born there and have a family member trying to sell a home, for quite sometime (too small for my family). However the reason I’m not in one of those homes entirely lies with the town.
Posted by: Ted | August 9, 2010 11:35 AM