To my knowlege, OFHEO does not track sub-prime mortgages, etc.

That makes the numbers even worse for Maryland.

I hate to sound like a broken record, but the bubble here is only just starting to burst, but watch out when it does.

I've been told it doesn't track subprime mortgages, but that point seems a bit unclear -- Fannie and Freddie do have billions of subprime bonds in their portfolios.

It's bad news for everyone, because income in Hawaii, DC, and Maryland has not risen nearly that much, if at all. And the fact that the financial sector is teetering on the edge of bank failures and insolvencies and there are still vast portions of the country in which significant price adjustments need to take place is telling. Buyers and sellers are still in a huge Mexican standoff because, in many parts of the state, the income of the median household does not even purchase the median home, and sellers are unwilling to admit that the value of their house has decreased or take negative equity. The situation in the financial sector isn't helping matters, either.

WaMu is done - that's all but a foregone conclusion. This is going to cause financial securities to plummet again and lenders to tighten credit more. This means that potential buyers cannot obtain the credit necessary to buy houses. As more and more of the "bubble houses" become delinquent over the subsequent months due to the complete lack of buyers, these bad assets will show up on banks' balance sheets, again scaring away investors, which will lead to more bank crises, which leads to less credit, and the vicious cycle repeats itself ad infinitum. Be ready for pain.

And no amount of BRAC relocations or secure government jobs is going to change the fact that, under conditions of tightening lending standards, these prices MUST reset to incomes. Maryland in not special, sheltered, or unique, no matter how much anyone wants to believe that it "can't happen here".

Both of these links will explain the difference:
http://blogs.wsj.com/economics/2008/02/26/ofheo-vs-case-shiller-a-primer/
http://calculatedrisk.blogspot.com/2008/01/house-prices-comparing-ofheo-vs-case.html

Enjoy.

According to Housingtracker.net, the decline in Baltimore-area asking prices is accelerating.

In my opinion, you only get the true picture by segregating the data a bit more, like MRIS does for it's MLS monthly statistic summaries.

If you look at the "Townhouse" market and the "Single Family" market, in many areas those median sale prices can differ by $100-200K+.

Most first-time homebuyers can't afford to buy a Single Family or at the "median home price", but CAN afford the townhouse median price.

Comparing the median home price to median income is just too aggregated to be useful.

Looking at something like median townhome price, compared to median income of renters aged 25-40 (as a proxy for "potential first time buyers") is where the focus on the question of affordability should be placed. (I haven't done so specifically, but have looked at some of the differences in TH/SFH sales trends)

I do, however, sympathize for those large (and extended) families with moderate incomes, for whom the typical 3-4 bedroom townhouse just won't work...