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Eight Factors Affecting Crofton Real Estate in ‘08

2008Throughout 2008, it’s been my goal to provide the Greater Crofton area with community and real estate information that is interesting and helpful, while attracting some undecided D.C. – Baltimore area home buyers to the Crofton real estate market.  It’s my way of giving back to the community that has kept me in business since 1973, while attracting new business.

Keeping you informed about the local real estate market has been at the top of my “to-do” list through monthly real estate market updates that measure results for the previous month.  Now, let’s take a look at a few factors which affected Crofton real estate during the past year, leading to those results.  I call them “Eight in ‘08” –

1.  Crofton Location – Crofton certainly has been touched by the woes of the national real estate market, but not to the extent of others in the country.  That’s because we’re somewhat insulated by our proximity to the Nation’s Capitol and so many military installations with a continual stream of new personnel.  The “Brac Factor” is a help, as well, with Northrop Grumman and other defense contractors continuing to expand in the D.C. – Baltimore – Annapolis triangle, attracting relocating personnel to this area.

2.  24–hour Media Coverage – The real estate market is subject to ups and downs, as natural as the rise and fall of the sun or moon on our horizon.  Never before, however, has the down cycle of any market been subject to so much discussion and dissection, turning this expected downturn into the centerpiece of the presidential campaign, cocktail party and office-cooler discussions, and the “woe-is-me” attitude regarding real estate that gripped our nation in 2008.  Did the media cause the downturn?  No, but it hasn’t done anything to mitigate it.

3.  Foreclosure Frenzy – As Adjustable Rate Mortgages reached their adjustment period, home values dropped and refinancing was no longer an option; beneficiaries of sub-prime lending policies imposed by congress to make housing “more affordable” were the first to face foreclosure… and then others fell, like dominoes, forcing people out of their homes and home values even lower.  Meanwhile, financial institutions tightened their credit qualifications, lending only to the most qualified borrowers and only if they have a sizable down payment.  No more 100% loans in this climate!

4.  The Presidential Election – As candidates sought political advantage from the downturn in the economy, bad news was emphasized in every campaign speech so each could make a case for how much better life would be under their administration, if elected.  This contributed to the pessimism on Main Street, thus fueling the downturn and giving it greater momentum.  After all, consumer and investor confidence is the lifeblood of the economy; neither candidate found it in their own best interest to calm people’s fears.

5.  The Demise of AIG, Countrywide, WAMU, Wachovia – As these financial giants shuttered their doors and others merged, many Americans lost their source of credit for home buying.  Meanwhile, other banks were putting a freeze on existing home equity credit lines and funds for development and construction.  On the heels of all this came higher unemployment – and more dominoes fell. 

6.  The Wall Street Bailout – So far, it doesn’t appear the taxpayers’ rescue of Wall Street and financial institutions in September has been the magic bullet we all expected.  I guess we’ll never know if or how much it did (or did not) help the economy, although experts will probably speculate about that for the rest of our lifetime.  Troubled homeowners were promised the rescue would trickle down to them, but I haven’t seen any evidence of that actually occurring.

7.  Real Estate Broker Shake-Up – Real estate firms in the Crofton area and across the country have been tightening their belts, even closing offices, declaring bankruptcy, merging, and changing names.  New minimum-service discount brokerages that emerged during the real estate bubble have all but disappeared.   Meanwhile, many real estate agents have been getting out of the business, taking other jobs, and changing companies to stronger brokers with superior support services for their clients.  As in past buyers’ markets, the strongest and most capable brokerage firms and agents will survive.

8.  USA vs. NAR – The U.S. Department of Justice (DOJ) settled their long legal battle with the National Association of REALTORS (NAR), with NAR’s Internet Data Exchange (IDX) being validated and no fine imposed on the REALTORS.  Additionally, NAR received an “okay” to reinstate the Virtual Office Website (VOW).  This is a huge win for consumers served by professional REALTOR members of the NAR!

If you don’t already subscribe to Focus On Crofton, why not do it now so you won’t miss anything in 2009.  You can receive new posts in your email box or via RSS Feed.

Copyright 2008.  Margaret Woda

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