Not only are the prices high but the taxes are insane, i recently found a nice 3BR in Fells for under $200K but couldn't buy it because the property taxes were over $5000!

And it was on a side street!

They'll never get large amounts of people to move back to the city until they do something about the tax issue.

We are trying to sell our house in Hamilton because the cost of tuition for our three children (two in high school, one in grade school) has put such a financial burden on us and our budget that a higher mortgage and public school in Baltimore County has become the best option for us financially. We barely have any money left for food let alone discretionary spending once we pay the mortgage, taxes and tuition. Unfortunately the failing schools and current housing market have left us walking a fiscal tightrope. Maybe the city council and Mayor could give us some relief like all of the churches and non-profits get. Then our family might be able to swing it and stay put. For the record we have a beautiful house and huge yard which we love and do not want to sell. We do not live extravagatly so excess lifestyle is not the issue. Maybe I should get my preachin' papers and zone my place as a church! Another family (classic definition of the word "family" mind you) fiscally beat and run out of our city... Signed, Blue collar and broke in B.C.! Why did I post this? BUY MY HOUSE MAYOR DIXON!

I like how you can see the correlation between the answers of first and second question. Of course renters will think that asking prices are too high. I chose "a bit too high" because if you looked at the close vs. list price % it is probably 95%+.

I think everyone these days is conveniently forgetting the benefits of owning your own home vs. renting one too and only noting the negatives. My sister and her husband are looking to rent a home right now and can't find anything they like at a price they are willing to spend. They have a dog, high expectations, and aren't willing to compromise on much. Whenever they find something they like they say, "but at this rent we could buy a place". Excactly! With a rental you can't do whatever you want to your house, you might not be able to have a dog, etc. Just something I think people are forgetting these days.

Jamie: I think just looking at closing vs list price can be a bit misleading. You could say that those homes that have actually closed might be "a bit overpriced", but that doesn't speak to the houses that are still on the market. Judging from the rise in inventory, I'd say there's quite a disparity in price vs value.

Kevin: isn't "value" defined as what the next guy is willing to pay? If a seller was asking $400k and sells for $380k net of any concessions, isn't the house worth $380k? I always find it funny when people dance around how to determine "value". It's worth what someone is willing to pay for it. Period. And, how can you determine how over priced active listings are without looking at sales? You'd have to have an appraisal done on every house. Certainly tax assessments are not an accurate measure.

I just ran the numbers for Baltimore City from MRIS and here's how it shakes out:

YTD 2008 sales (fee simple, coop & condo)

Avg List = $221,670
Avg Close = $213,405
Avg Subsidy = $3,367
Avg Net Close = $210,038
% of Net Close to List = 94%
Max % of List = 133%
Min % of List = 57%
Avg Days on Market = 116

6% off including concessions doesn't seem like "much too high of list prices". Of course, many of these listings were probably lowered before they finally sold, but 3 1/2 months on the market as pretty good considering many believe the sky is falling. Maybe somewhere in between "a bit too high" and "much too high" is where list prices have been this year.

Jamie T,

The fact that you can get to the subsidy tells me that you are a realtor. Is it possible you are biased? After all, the more a house sells for, the more commission you make.

Houses here are incredibly overpriced! In what world does 75% appreciation over 5 years (according to OFHEO) constitute reality?

You know, to a large extent, it's people like you that are responsible for the mess we're in. As long as you make your 6% you could care less.

Anon,

Instead of judging me personally, why don't you respond to the data? Unless you think I have manipulated the data, it doesn't lie.

And, just because the price of something went up relatively quickly by historical standards doesn't mean it will come back down. In the late 90s during the tech boom apartment rents in northern VA were increasing 10% - 15% a year...they've still gone up every year since even with the tech wreck and 9/11.

Jamie,

If you check out the next blog entry, I think your case has been worsened. 8% difference is pretty significant. And no, I'm not trying to ignore the sales as you are claiming. You are right that I cannot check the actual value of all unsold homes. I am inferring that the asking prices are too high from the fact there are more unsold homes that stay that way for longer amount of time.

Here's my point. Sales are down, inventory is up. This indicates a disconnect between amount sellers want to receive, and amount buyers want to sell for. If the homes that do actually sell are off by 8%, how much are the ones that don't sell?

Jamie T,

Funny, I thought I was responding to the data. I don't believe you manipulated the data, I just don't think you can interpret it correctly. And yes, if it bubbled up, it must bubble down.

If you feel attacked, perhaps you should stay out of the kitchen.

For what it's worth, here are links to 2 other relevant stories.

1. Housing wire is reporting "steep declines" in Maryland (http://www.housingwire.com/2008/07/10/home-prices-off-more-than-20-percent-nationally-report/). If prices weren't absurdly high, this correction would not be happening.

2. Market Watch has Baltimore losing population from 2006-2007 according to the Census Bureau (http://www.marketwatch.com/news/story/us-census-bureau-new-orleans/story.aspx?guid=%7BFA1A03A2-4051-45F2-807B-ED22F5FBBCB1%7D&dist=hppr). So there will be less people to purchase the extreme oversupply of overpriced housing.

Kevin,

My numbers were year to date as of the other day, so including June and previous months. So things have worsened in June, but I guess it depends on what your definition of "much to0 overpriced" is. I was thinking 10%+. Remember, 100% isn't normal. But, to answer your question about the current listings, you won't know until they sell. It's an impossible question to answer. All you can do is look at the recent history, which is what I did. Just like an appraiser would do. Look at the recent data and speculate less on what you think will happen in the future.

Anon,

I agree that prices have come down overall in Maryland and Baltimore and most parts of the planet for that matter There is no debating that. Jamie Smith Hopkins' question was: are active listings currently priced too high and by how much. I said "a bit" based on 2008 sales YTD in Baltimore City. If you define "a bit" differently than me, that is fine. And, I don't feel attacked. I have access to more information than you so I can understand your frustration. But, I'm not sure how having access to that information makes me any more biased than you might be. You are a potential buyer and are biased toward thinking list prices are too high just like a seller may think sale prices are too low.

Jamie T

If housing prices fall, so does your commission. How can that fail to bias you?

Not to mince words, but my perception that housing is way over-priced is not bias, it is reality. Just look at the 75% increase in 5 years OFHEO says we have here.