Agents Report Interest In Berlin Housing Market
BERLIN - While some in Berlin are worried that their property may be assessed this year at a lower value than previous years, local experts say the market is actually returning to a normal level after a price boom and that recent higher prices were anomalies.
'In the boom, that was not a normal market,' said Jenny Sheppard, associate broker with Sheppard Realty. 'I think the market has normalized.'
Any drop in property value is relative, Sheppard said, with property owners shocked by the comparison with very high prices.
'It's such a difference from the boom,' she said.
Another difference is the length of time property sits on the market before selling. Property that used to sell in a month or less now take several months, said Sheppard, which is more appropriate and realistic.
Real estate agent Cam Bunting of Bunting Realty estimated that property values in the town of Berlin were down 20 to 30 percent, in the worse-case scenario, based on properties sold recently.
'Berlin has done better than some other areas like Ocean Pines and Ocean City,' said Bunting.
Sheppard said she could not give a percentage on reduced property values, but gave as an example a ranch house that might have sold for $250,000 three years ago, might sell for $210,000 this year. She characterized the price decrease as moderate.
Prices have gone down in part because of short sales, in which banks accept less than the value of the mortgage for foreclosed properties, Sheppard said.
Bunting also pointed to lack of sales on foreclosed properties, saying that at times no one comes out to bid despite the chance for a bargain.
Banks are also increasing and tightening up loan regulations, Bunting said.
The market is not yet stable, according to Sheppard. 'From what I've heard, it's going to be another year before things get back to normal,' Sheppard said.
Bunting estimated that the market would rebound in the next year.
The market for coastal property follows different trends than the typical suburban property market.
'Values here along the coast are always going to be different,' Sheppard said.
People are definitely still buying, real estate agents said.
'Phenomenal' interest rates are available, promoting sales, according to Sheppard.
'The phones are ringing more now,' said Bunting. 'There are people out there that have money and can buy.'
'We're seeing more first-time homebuyers still,' Sheppard said. 'And a lot of people really want to make that move from the Pennsylvania or New York area.'
Commercial sales are not too bad, either, Bunting said.
Berlin is a popular market with current buyers.
'We probably get more calls for in-Berlin than outside,' said Bunting. 'People think it's a nice town.'
The local property market could do better if buyers did not have to attempt to sell their current homes in other markets.
'The problem is usually that people have something to sell before they can move to Berlin. Unless they can sell their other property, they're stuck,' said Bunting.
Sheppard, whose office is on Berlin's Main Street, said she often speaks to visitors who would like to move to Berlin, but lament that they cannot sell their current property in the current market.
While the area is touted as a good market for investors, Sheppard said she has not encountered many buyers looking to invest in property. However, she said, with the low interest rates prevalent now, investors who have been waiting for the right time to make a purchase might soon make a move.
Berlin, along with the rest of northern Worcester County outside the resort, will be reassessed by the state this year for tax purposes. The new values will not kick in until 2010, and the next tax bills will not be affected.
Worcester County Assessor Robert Smith said that he could not estimate any drop in property values. Property value assessments follow the market value. No other standard is used.
'The work hasn't even been started for the town of Berlin and it won't be for awhile,' said Smith.
Smith acknowledged that other parts of Worcester County, principally and notably Ocean City, have shown significant declines in property value. Statewide, Maryland property values are down 3.4 percent.
If values are down when properties are reassessed, those holding onto their properties and not planning to sell will actually benefit from lower assessments, with a smaller tax bill, if property tax rates remain stable.
Property value is intangible until a house actually goes on the market.
'It's not a material thing that you can feel, that someone can take away from you,' said Bunting. 'It's all a numbers thing.'