A study commissioned by the Maryland State Builders Association was released this week which revealed that appraised values for Maryland housing has been negatively impacted by the number of foreclosures in the state.
In turn the availability of credit for consumers has also been affected with lack of stability in the market.
The Baltimore based Sage Policy Group, Inc., headed by the well known economist Anirban Basu, also notes that while the positive boost to housing figures earlier this year came “mostly [as] a result of tax credits through the federal stimulus package,” the trend is not favorable, even though mortgage rates are at historically low levels.
In the construction arena, new home starts in Maryland are off 40% from early 2005 to the spring of 2010. This has caused the job market in the industry to fall by 20% in the last 3 years.
Nationally the industry has lost a total of over $3million jobs during the 5 year period at a value of over $145million in wages.
The issue of tight credit covers the homebuyer’s ability of buy, as well as the developer and builder’s ability to build. “Because less credit is available, property values shrink and credit becomes even more difficult to come by. Instead of adhering to its traditional cyclical, up-and-down nature, the housing market is mired in a cycle of declining value and shrinking credit” that study says.
The full 19 page study is entitled Housing Market Remains in the Basement and is also available through CenterMaryland.org, a web based news outlet on issues regarding Maryland.