Hyperlocal Real Estate: Why Neighborhood Trends Matter Most

 

If you follow real estate news, most of the information you’ll come across focuses on national or regional trends. While this broader perspective can be useful—offering insight into the economy and how it might impact our finances, -- it doesn’t address what truly matters when it comes to your home: your local market. High-level stats like housing starts or interest rate trends give us context, but they don’t reflect the specific dynamics of our neighborhoods.

You’ve likely heard the phrase, “Real estate is all about location, location, location,” and that couldn't be more true here in our suburban and rural community. We’re fortunate to live in an area with many HOA-free neighborhoods, mostly single-family homes on generous half-acre to 1.5-acre lots, and top-rated schools. With easy access to Columbia, Baltimore, the I-270 tech corridor, and even Washington, D.C., our location strikes a great balance between convenience and peaceful living. And for those seeking a small-city vibe, Frederick is just a short drive away. Comparing our area to places like Germantown, Rockville, or Bethesda underscores the unique charm of our community.

To illustrate just how local real estate truly is, let’s look at some market statistics comparing Mount Airy, New Market, Ijamsville, with Rockville. While some numbers aren’t directly comparable, the trends reveal important differences:

Category	Mount Airy, New Market, Ijamsville (Data)	Mount Airy, New Market, Ijamsville (% Change)	Rockville (Data)	Rockville (% Change)	Insights
Units Sold	n/a	-19%	n/a	-7%	Both areas saw a decline in units sold year-over-year, with Mount Airy, New Market, and Ijamsville experiencing a sharper drop.
Active Inventory	n/a	+2%	n/a	+14%	Active inventory grew in both markets, but Rockville's inventory increase is notably higher, suggesting more choices for buyers there.
Median Sales Price	$547,225	No Change	$641,500	+18%	Rockville experienced significant price appreciation, while prices remained steady in Mount Airy, New Market, and Ijamsville.
Days on Market	31	+48%	30	+36%	Homes are taking longer to sell in both areas, which may indicate a cooling market overall.
New Listings	n/a	-15%	n/a	-5%	A decrease in new listings suggests that fewer homeowners are entering the market to sell, particularly in Mount Airy, New Market, and Ijamsville.
Current Contracts	n/a	-7%	n/a	-4%	Fewer contracts are being signed year-over-year, with Mount Airy, New Market, and Ijamsville again seeing a larger decline.
Sold vs. List Price	98.6%	-2.8%	101.8%	No Change	Rockville sellers are achieving closer to their asking price, while Mount Airy, New Market, and Ijamsville show a slight decrease in negotiation power.
Months of Supply	2.3	+26%	1.9	+23%	Supply is growing in both markets, indicating that inventory levels are improving slightly, but Rockville's supply remains tighter overall.

Clearly, using data from one area to represent another doesn’t make sense. That’s why I rely on Long & Foster’s (L&F) Market Minute Reports, which provide local insights. For our area, that includes Mount Airy, New Market, and Ijamsville—offering a data sample robust enough to prevent outliers from skewing results.

Real estate, like politics, is hyperlocal. Even within our larger community, the northern part of
Ijamsville can differ significantly from the southern part. When working with clients, I focus on micro-market trends, using comparable areas (see figure 1) with similar characteristics—such as home size, lot size, construction era, and proximity to schools or amenities. These insights help me provide accurate recommendations for pricing homes.

The charts I use during consultations visually present trends over the past six to twelve months, making it easy for clients to understand their market and the reasoning behind my pricing advice. Armed with this data, they can confidently decide on the best listing price for their home.

If you’d like to stay informed about our local market, I’m happy to share L&F’s Market Minute Report monthly. Just let me know, and I’ll add you to the email list! The charts for February 2025 can be found here.

If you would like to see the type of charts I use to recommend list prices, I would be pleased to provide you with a Real Estate Review, in person or by zoom, that shows current local trends and estimates your home's market value. For a more detailed explanation, you can find a description here.

Thank you for reading this article. I would love to meet you and talk about real estate, and perhaps your future plans. If you know anyone else considering a move, I’d be grateful for your referral. I promise to take great care of them.

2025 Real Estate Market Predictions for Southern Frederick County

As we enter the new year, it's time to forecast the real estate market for 2025. While predictions often change within months, evaluating recent trends and combining national and local insights can provide a
useful outlook for Southern Frederick County, Maryland (SFC).

My Prediction

Southern Frederick Md. Local Area for Prediction

For early 2025, I anticipate minimal changes from 2024. Inventory levels, consumer debt, and interest rates are likely to remain stable, keeping home prices relatively unchanged. If mortgage rates decrease by a point, pent-up demand could lead to a strong first half of the year. However, significant positive changes may not occur until late 2025 or 2026, as the new administration's policies take effect. These changes, whether through legislation or executive orders, will take time to impact the economy, if they help at all.

Key Factors

1. Mortgage Rates: Predictions suggest rates will stay above 6.5% in 2025. For market gains, rates need to drop below 5.75%. For more details, see my post on Decoding Mortgage Rates.
2. Low Housing Inventory: Inventory in SFC has decreased by 42% since 2020, with no signs of improvement. Telecommuting trends may reverse, potentially affecting inventory levels. The new administration's policies will also limit telecommuting significantly, impacting the market. For more details, see my post on Understanding Low Housing Inventory
3.  Consumer Debt: Credit card debt has surged 32% since May 2021, exceeding $1 trillion.

   

   Consumer Debt

   Delinquency rates are also skyrocketing. Debt affects mortgage qualifications as lenders use the debt-to-income ratio to set borrowing limits. Rising delinquency rates show this problem is not getting better soon. The government is considering temporary limits on credit card interest rates to reduce consumer debt, but that is wishful thinking for now.
4. New Administration Policies: The new administration’s policies are starting to be implemented, with the aim to boost the U.S. economy. Key areas include:
• Housing: A few new federal employees may seek housing in SFC, potentially affecting the market. However, most of them will reside in Montgomery County and Northern Virginia.

o   Deportations of undocumented immigrants could significantly impact the housing market. While precise figures for Frederick County are unavailable, the potential effects are noteworthy. Forced deportations may increase the availability of rental properties, easing that segment of the market. However, properties owned by undocumented individuals could present challenges. Although I am not a lawyer, it is likely that these individuals would retain ownership but must continue making mortgage payments to avoid foreclosure. The resolution of these issues will be interesting to observe.

Self-deportation might result in a more orderly process, allowing individuals to manage their exit more effectively.

• Economic Improvements: Policies on tax cuts, energy independence, deregulation, and government efficiency have the potential to impact the market, though their effects will take time to materialize.

 

Actions to Consider

Timing the market is challenging and not recommended. If you are planning on selling and/or buying soon, contact me now at 301-873-2106. We can get the ball rolling.

If you're planning a move, start preparing now. Buyers should focus on reducing debt, improving credit scores, saving for a down payment. You also need to decide where you want to live. Contact me, I can help with that.

 Sellers should declutter, make minor repairs, and plan their next steps for their future. For more ideas, please see these previous posts: Benefits and Roadblocks When Decluttering, Overcoming the Difficulties of Decluttering, Strategies for Showcasing Your Home for Sale and Transform Your Home from “Just Another Listing”.

I am available to help you act when you think the time is right. If you'd like to discuss your situation, call or text me at 301-873-2106 or email me at BReynolds@LNF.com. I'm here to help with your real estate needs, even if your purchase or sale is in the future. Your referrals are always appreciated.

Let's get started. Contact me at 301-873-2106 or email me at BReynolds@LNF.com.

Understanding Low Housing Inventory: Key Factors Impacting Frederick County Real Estate in 2024

 

 

As we usher in the new year, many are keen to understand what lies ahead for the real estate market. Home sellers, buyers, and investors alike are eager to strategize and achieve their goals in the coming months. 

Before diving into my predictions for the year, I want to lay some groundwork by discussing two key factors that will shape the market: mortgage interest rates and housing inventory. 

In my previous post, I explored the elements that influence mortgage interest rates. Now, let's delve into the significant reasons behind our current low housing inventory. In my next post, I'll share my predictions for the year. 

You've likely heard the saying that real estate, much like politics, is very local. While national trends do play a role, the most impactful drivers are often local. My observations will focus on Southern Frederick County, Maryland, where I conduct most of my business. 

Frederick County is a popular and desirable place to live. It has been growing steadily, is business-friendly, has a reasonably low crime rate, and boasts high-ranking schools. So, why is there a lower housing inventory in Frederick County, MD? Here are some factors contributing to this situation:

 

1. Underbuilding: Despite several new subdivisions being built over the past decade, the construction of new homes may not be keeping pace with demand. This has contributed to a deficit in the housing supply.
2. High Demand: Frederick County's desirable location, excellent schools, and high quality of life drive strong demand for homes. This demand often exceeds the available supply, leading to lower inventory levels.
3. Homeowner Reluctance to Sell: Many homeowners are hesitant to sell their properties for several reasons:
• High Interest Rates: Many people refinanced their home loans when interest rates were very low between 2019 and 2021. Buying a new home at a current rate of 6.5%, compared to their existing 3% loan, would make the purchase more expensive. Additionally, some homeowners may be waiting for even higher prices before deciding to sell.
• Low Inventory: This creates a circular problem. Homeowners are reluctant to sell because they worry they won't find a suitable new home or can't afford to own two homes simultaneously while working out their loans, even though there are strategies to address this issue.
• Seniors Aging in Place: Over the past 15 to 20 years, it has become easier for older adults

  

  Homeowner Equity by Generation
   

  
  to remain in their homes longer. They are in better health, have new ways of managing infirmities, and have often paid off their homes, with no desire to take on a new loan. Unfortunately, they hold a majority of home ownership equity. Nationally, the Silent and Baby Boomer generations hold about 51% of total housing equity. Assuming this is roughly true for Frederick County, a significant percentage of properties are effectively off the market.
4. Economic Stability: Frederick County's relatively stable local economy, with steady job growth and low unemployment rates, encourages people to stay in their homes longer, reducing the number of properties available for sale.
5. Tighter Lending Standards: Stricter lending standards have resulted in fewer distressed properties, such as foreclosures, entering the market. This has also contributed to the lower inventory, as there are fewer homes being sold under duress. 

Understanding the factors behind low housing inventory is crucial for anyone involved in the real estate market. By recognizing the impact of underbuilding, high demand, homeowner reluctance to sell, economic stability, and tighter lending standards, we can better navigate the challenges and opportunities that lie ahead. Stay tuned for my next post, where I will share my predictions for the real estate market in the coming year. Together, we can make informed decisions and achieve our goals in this dynamic market. 

If you'd like to discuss what's best for you, feel free to call or text me at 301-873-2106 or email me at BReynolds@LNF.com. We can have an open discussion about your circumstances so you can make informed decisions. Remember, I don't do hard sales or pressure you into action—buying or selling your home is entirely up to you. 

As always, I'm here to assist with your real estate needs, even if your purchase or sale is some time away. The better prepared you are, the less stressful the process will be. Finally, if you know anyone looking to buy or sell, your referral would be greatly appreciated. 

Let's get started. Contact me at 301-873-2106 or email me at BReynolds@LNF.com.

 

 

Decoding Mortgage Rates: The Key Factors to Watch

 

Mortgage rates significantly impact the housing market, yet their determination is often misunderstood. It may seem rates are set arbitrarily, but there's a logical framework behind them. By understanding these factors, you can make informed short-term forecasts. However, long-term predictions are challenging due to numerous and various influences, such as natural disasters, political upheavals, new government policies, and legislative changes, which complicate the landscape.

We'll explore the major influences on mortgage rates and considerations for individual borrowers.

1. Federal Reserve Policies: The Fed sets the federal funds rate, impacting overall borrowing costs. When the Fed raises rates to combat inflation, mortgage rates typically increase. Conversely, lower rates to stimulate growth lead to decreased mortgage rates. Mortgage rates often move in anticipation of future Fed moves.

2. Inflation: Inflation reduces the money’s purchasing power, prompting lenders to demand higher interest rates. Higher inflation usually results in higher mortgage rates. Conversely, low inflation generally leads to lower rates.

3. Economic Indicators: Key indicators such as employment rates, GDP growth, and consumer spending provide insights into the economy's health. Strong performance often leads to higher mortgage rates due to increased credit demand. During downturns, reduced demand can lead to lower rates.

4. Housing Market Conditions: Supply and demand dynamics significantly affect mortgage rates. High demand and limited supply drive rates up, while oversupply can lead to lower rates.

5. Global Events: International events, like geopolitical tensions or economic crises, impact investor confidence and financial markets. Uncertainty or instability can cause mortgage rates to fluctuate.

6. Government-Sponsored Enterprises (GSEs): Entities like Fannie Mae and Freddie Mac play a crucial role by buying and securitizing mortgages. Their policies and actions affect mortgage rates. Changes in GSE regulations can result in rate adjustments.

Investors balance these factors to determine acceptable returns from their loans. The final adjustments to the rate offered to specific borrowers depend on: 

1. Credit Scores and Personal Financial Health: Higher credit scores generally result in slightly lower mortgage rates due to perceived lower risk. Conversely, lower scores can lead to slightly higher rates due to increased default risk.

2. Lender Policies: Different lenders have varying criteria and policies affecting the rates they offer. Factors like the lender's cost of capital, risk appetite, and competitive positioning influence interest rates. Promotions and special offers can also lead to temporary fluctuations.

Forecasting interest rates months or years from now is challenging at best. Most 2024 predictions were off, so take future outlooks with caution—they're educated guesses too. For your edification, here are one set of predictions for 2025:

Figure 1: Source: US News

Should You Wait or Buy in 2025?

Understanding how mortgage rates are determined shows many uncontrollable variables make predictions short-lived. If you're a prospective homeowner waiting for rates to drop, remember macroeconomic issues are beyond your control. Decide if you're financially ready to purchase a home and manage its expenses.

Focus on What You Can Control: Instead of fixating on rates, prioritize actions to lower your individual rate, such as saving for a larger down payment and improving your credit score.

Should You Wait or Sell in 2025?

If you're ready to sell, don't try to time the market based on rates alone. In Southern Frederick County and northern Montgomery County, low inventory and eager buyers mean a well-prepared, appropriately priced home will likely sell quickly at a fair price.

If you'd like to discuss what's best for you, feel free to call or text me at 301-873-2106 or email me at BReynolds@LNF.com. We can have an open discussion about your circumstances so you can make an informed decision. Remember, I don't do hard sales or pressure you into action—that's entirely up to you.

As always, I'm here to assist with your real estate needs, even if your purchase or sale is some time away. The better prepared you are, the less stressful the process will be. Finally, if you know anyone looking to buy or sell, your referral would be greatly appreciated. 

Let's get started. Contact me at 301-873-2106 or email me at BReynolds@LNF.com.