Pasadena Real Estate Market Remains Solid

Low housing inventory, high demand and strong employment continue to support a solid residential real estate market in the Pasadena area.

“Things are a little slow right now, but we’re still pretty busy over here – no question about it,” said Don Gurney, a broker at Century 21 in Pasadena. He added that “sellers are getting multiple bids, and sellers are dropping contingencies,” a common strategy buyers use to make their bids more attractive.

According to real estate website Zillow, the Home Value Index for Pasadena increased 5.8 percent from May 2017 to June 2018. However, even though home prices in many parts of the country have fully recovered from the 2007-2008 housing bust, Zillow reports Pasadena prices are still nearly 10 percent below their peak prices reached in March 2007.

Gurney said the current seller’s market and tight conditions are hurting first-time homebuyers the most. “There are lots of first-time buyers looking to buy, but prices are being pushed up, forcing them out of the market,” Gurney said. Houses priced at $250,000 and below have been selling quickly, he added.

Heather McFrees, a realtor at Keller Williams Flagship of Maryland in Millersville, agrees. “What is particularly difficult to find are turn-key homes for buyers,” she said. “Newly built or newly renovated homes that have the newest features and are beautifully decorated to look similar to the last two minutes of an HGTV show are being sold quickly and at a premium.”

Interest rates also play a major factor into the cost of home ownership. “But interest rates are still pretty good,” Gurney said. For over the past year, the Federal Reserve has been on a campaign to gradually raise short-term interest rates and has signaled plans to continue raising rates into next year. Mortgage rates, however, which follow long-term rates rather than short-term rates, don’t always follow suit. Long-term rates rose sharply earlier this year but have since leveled off.

Despite the threat of higher rates, the Pasadena area continues to be attractive. “Buyers are drawn to Pasadena, whether it be for the water-privileged communities, the small-community feel or the high-ranking schools,” McFrees noted.

McFrees also advised that choosing a home in need of work could be financially advantageous in the long run. “With the current low inventory, it’s a great time for buyers to think outside of the box,” she said. “Many of the homes that are currently on the market need a little updating or possibly a full renovation, but investing in a home that needs work can instantly add equity and would cost less in the long run.”

The Anne Arundel County Association of Realtors expects demand for housing to continue to grow in conjunction with the economy, according to its March 2018 economic outlook for real estate. Anne Arundel County’s unemployment rate stood at just 3.1 percent at the end of 2017, below the state’s unemployment rate of 4 percent. Given the surge in consumer confidence combined with relatively low interest rates since the Great Recession ended, “Interest in homeownership is becoming increasingly apparent,” the report concluded.