Good News/Bad News
The Frederick News-Post generally is not inclined to splash good news in its headlines on the front page. So, I was surprised this week to read, above the fold, about a dramatic increase in existing home sales and the price of homes.
Now, in my book this is not completely good news; it is more of a mixed bag. But first the facts.
In June of this year in Frederick County, there were 23% more homes sold than in the same month in 2012. That is an extraordinary increase for one year.
Additionally, this June prices were 20% higher than last year. That is what I think creates a good news/bad news situation.
First, the good news. More home sales mean more income for people in the selling business, more revenue for the county through transfer taxes, and just an overall uptick in the economy. The more houses that sell, the more likely we will see an increased number on the market, and, thus, creating a good healthy economic cycle. As we have been told all our lives, housing leads us out of a recession. Maybe we are finally working our way out of it.
Now the bad news. And it is only partly bad news; because, if you are a seller, a 20% increase in the medium price obviously is good news. But for people looking for a home, particularly first-time homebuyers, it makes it more difficult to find that affordable home that they need. And when you add it to modestly rising home mortgage rates, prices could get in the way of a fully robust housing market.
I am not Nobel Prize winning economist, but I do know one thing about economic law. One of the things that run prices up is when you have more demand for a product than you have supply.
For the last couple of years we have heard constant whining and complaining about residential projects being approved. The vast majority of these projects are ones that had been in the pipeline previously but had been slowed down for either governmental, zoning, or market reasons. They are just now getting back off the drawing board and into production, which should increase the supply of housing.
I have said from day one that what we need in Frederick County is not higher taxes, but more taxpayers. And to get more taxpayers, we need more housing to hold prices down and bring the first-time homebuyer into this market.
Liberals and other do-gooders love to talk about affordable housing. However, when you actually talk about implementing government policies that could make housing more affordable, they quickly jump to the other side and criticize those who have to make the decisions. We have been hearing it for three years now, and my guess is we will hear it for many years more.
We are very lucky in Frederick County to have a lifestyle, an economy, and a quality of life that others want to come and enjoy. I, for one, will welcome them. I hope you will, too.