Prices in St. Mary's don't match demand

[Kain99]

Want to move to St. Mary's County and spend $300,000 or more on a house? No problem. Need a house for $150,000 or less? No way.

That's the conclusion of a long-awaited study on housing needs unveiled last week at the county's third annual affordable housing forum.

The $35,000 report by a consulting firm retained by the county documents the wide gap between supply and demand in St. Mary's, where median household income is $80,000 but nearly one-fourth of the households have annual incomes under $29,000.

The study , conducted by the Danter Company of Columbus, Ohio, was commissioned last year by the Board of County Commissioners after previous housing forums identified local problems with affordable housing and homelessness.

Source: Washington Post

 

[SmallTown]

holy crap! $800 for a mobile home rental!

 

[vraiblonde]

Supply and demand - funny how people don't understand that concept. It stands to reason that if there is a demand for lower priced housing, someone will come along and fill the market. If there's a surplus of $300,000 homes, no one will buy them and builders will quit making them because they don't sell.

'Supply and demand' markets tend to regulate themselves. I wouldn't worry about it too much.

 

[Pete]

Originally posted by vraiblonde
Supply and demand - funny how people don't understand that concept. It stands to reason that if there is a demand for lower priced housing, someone will come along and fill the market. If there's a surplus of $300,000 homes, no one will buy them and builders will quit making them because they don't sell.

'Supply and demand' markets tend to regulate themselves. I wouldn't worry about it too much.

I demand a $300,000 house and I will gladly supply $150,000 for it !

Do I have the supply and demand thing down vrai?

 

[SmallTown]

Originally posted by vraiblonde
Supply and demand - funny how people don't understand that concept. It stands to reason that if there is a demand for lower priced housing, someone will come along and fill the market. If there's a surplus of $300,000 homes, no one will buy them and builders will quit making them because they don't sell.

'Supply and demand' markets tend to regulate themselves. I wouldn't worry about it too much.

That is how things work in most places, not so in Saint Marys. There is a need for lower priced homes, and not a need for higher priced ones, and builders continue to build the higher priced ones. Also, builders there love to drag their feet, keeping volume down and thus prices up. If builders weren't so greedy, then many of the housing shortages would be fixed there. Heck, when I questioned a sales person representing a developer about simply being greedy, her only response was "all builders are greedy"

Even on re-sells, the market is very limited in that price range. But whenever a builder discusses "Affordable homes" people start thinking ghetto and they don't want it. They built those new townhomes on chancellors run road. Decent places, and not that expensive. But they COMPLETELY cleared the area for building it. No wonder the people don't want "affordable housing" if this is how they do it. Tree harvesting is a pretty big business, and developers make a killing off this alone.

 

[vraiblonde]

So, ST, what you're saying is that even if builders can't sell their $300,000 homes, they'll still build them because they're greedy?

 

[SmallTown]

Originally posted by vraiblonde
So, ST, what you're saying is that even if builders can't sell their $300,000 homes, they'll still build them because they're greedy?

To an extent, then they will move on. While driving around looking at homes before we decided to move away, there were many spec homes in this price range. Houses they built (Build and they will come...) and couldn't sell. They could lower the prices, but then others in the area would protest because their values would go down as well. So they build them, then go on and eventually someone will buy. And since the housing cost is not based just on increasing cost of land here, they cat afford to sit on it for awhile and still make money. and after they get a few sold, they can't imagine selling more homes at a lower price/profit. Some people don't understand if it costs you to $120K to build a $180k, and $100K to build a 140K home, and the market is calling for lower priced homes, that they can actually make more money by selling 6 of the lower priced homes than 3 higher priced ones. This is one basic economic idea that many people just don't get.

 

[Otter]

Ex SOMD resident speaking of building conspiracies in St Mary's County.

 

[jazz lady]

Originally posted by SmallTown
To an extent, then they will move on. While driving around looking at homes before we decided to move away, there were many spec homes in this price range. Houses they built (Build and they will come...) and couldn't sell.

WHERE??? I don't see ANY new homes just sitting empty in this area. Most are snatched up BEFORE they make it to market. Most if not all of the home builders in this area are booked solid for a couple of years.

Some people don't understand if it costs you to $120K to build a $180k, and $100K to build a 140K home, and the market is calling for lower priced homes, that they can actually make more money by selling 6 of the lower priced homes than 3 higher priced ones. This is one basic economic idea that many people just don't get.

Yup, us porr lil SMIBs kant unnerstan tings lik dat.

 

[SxyPrincess]

Hey, ST

Did you notice any waterfront homes for sale in Charles County recently?

 

[SmallTown]

Originally posted by SxyPrincess
Hey, ST

Did you notice any waterfront homes for sale in Charles County recently?

Didn't look into charles county. Schools there are pretty bad from what people have said who live there.

 

[SmallTown]

Originally posted by jazz lady
WHERE??? I don't see ANY new homes just sitting empty in this area. Most are snatched up BEFORE they make it to market. Most if not all of the home builders in this area are booked solid for a couple of years.



Yup, us porr lil SMIBs kant unnerstan tings lik dat.

'In this "skewered marketplace," he said, "we have great choices for persons who want to move into a $300,000 house. We have a surplus on the high end."

However, the demand for homes priced at $175,000 or less is twice the supply, Danter said. "We just don't have the product."'

Guess it depends on where you are looking.

 

[vraiblonde]

ST, you obviously don't know the home building industry. Not to say that I'm some expert but I've worked with builders and RE agents my whole career so I have some working knowledge of it.

But that aside, I just ran a search on O'Brien Realty's website for St. Mary's single-family homes, $200,000 or less and there were 87 listings. Century 21 had over 100. About half of them were in the $100- to $150,000 range and a good number were under $100k.

 

[Pete]

Originally posted by SmallTown
Houses they built (Build and they will come...) and couldn't sell.

Well I am here to tell ya, I have been looking via the MLS for a few months now and talking to my agent and the typical house of any price lasts about 1 week on the market. Must have changed since you looked.

Originally posted by SmallTown

They could lower the prices, but then others in the area would protest because their values would go down as well. So they build them, then go on and eventually someone will buy. And since the housing cost is not based just on increasing cost of land here, they cat afford to sit on it for awhile and still make money.

Builders don't care about your property value, especially if they are finishing out a subdivision. What they care about is the capital tied up in a house that is sitting empty and the interest on the builders loan they are paying while it sits. They know what the market will pay and get very close to that.

Originally posted by SmallTown

and after they get a few sold, they can't imagine selling more homes at a lower price/profit. Some people don't understand if it costs you to $120K to build a $180k, and $100K to build a 140K home, and the market is calling for lower priced homes, that they can actually make more money by selling 6 of the lower priced homes than 3 higher priced ones. This is one basic economic idea that many people just don't get. .

You really think that these guys are that stupid. You really think that cost vs relative size is linear? Could it be that these guys know something about the construction business that your ECO-201 class back in the day didn't go into detail about?

If there were similar profit to be made from sub 150K houses someone would fill the need. Evidently there is not enough legitimate demand for lower priced housing.

Now before you freak out about legitimate demand, what I mean is that there are enough people who COULD qualify for a mortgage in the area of $50,000 to $60,000 to maintain the 36% debt to income ratio required by most lenders. A $28,000 income household would have $700 to work with for the 36%. Take away anything they are making payments on and the max they could afford is a $63,000 house. With lumber priced, labor, taxes, fees, anything they did build for $63,000 no one would live in.

Builders would build a bunch of spec houses, on prime real estate and get stuck with them because the market that would live in that area cannot qualify for a loan. Low income housing (rental/lease) is not the business builders want to get into.

 

[vraiblonde]

Low income housing (rental/lease) is not the business builders want to get into.

Not to mention banks don't like high risk loans because then the owner defaults and the bank is stuck.

 

[darkclown]

Skewed markets

Housing anywhere in Northern Virginia is very bad, the cost of housing here is directly influenced by prices in DC. Its an unfortunate reality and is why it will be hard for me to find a house here that is affordable and can meet my requirements. We may be pushed out of the area all together, which is really a sad state. I can probably get 25% more home in the Richmond area for a comparable home here. The commissioners need to get the developers under control. No one wants to pay 250K for some of the awful construction in these developments. I've looked at single family homes, and this is after I have already been abused by a developer here because there is NO recourse in this county to protect us.



:bandit:
Happy Cinco de Mayo

 

[Pete]

I forgot to subtract the 5% closing costs form my previous estimate. That would make an affordable home for the $28,000 a year crowd $59,850 sale price. Take away the 10% profit for the builder and your left with a total cost of building $53,800. Not an expert on the local smc economy but judging from the median housing costs compared to the tax rate I doubt you could get an Amish build shed with running water for $53,000

 

[vraiblonde]

You could get even more home for your money in the midwest or Florida. My folks in Nebraska just bought a 3,500 sq.ft. home in an exclusive lakefront community for (ready?) about $200,000.

 

[sleuth]

A home that costs $140K in Lusby costs about $160-180K in St. Mary's.

I know this because I'm looking to buy a home (3 BR, 2 BA, and a garage, walk-out basement, or other storage) for $140K or therabouts in St. Mary's, but I think my last search turned up 5 results, all of which were in the poor districts of the county.

The same search yielded about 16 in Lusby, most of which were much nicer than the equivalent priced ones in St. Mary's.

I've been sorely disappointed by the lack of affordable housing in St. Mary's County.

 

[SmallTown]

the drive from lusby to pax is a pain in traffic, but worth it for the housing prices. We saw some really nice homes in calvert that weren't badly priced at all.