Maryland is a judicial foreclosure state, which may have contributed to its placement among the few states in the U.S. to see a rise in foreclosure inventory year over year. As of February 2013, about 3.5 percent of homes in Maryland were foreclosures. This is a 0.2 percent increase from the previous year. In that year's time, there were over 4,000 completed foreclosures.
With this statistic, Maryland comes in 9th place in the United States for total foreclosures a percentage of real estate inventories. As more data becomes available, these numbers may edge higher.
Maryland Foreclosure Rate Increases Buck Nationwide Trends
In the 4th quarter of 2011, about 10 percent of Maryland homes were considered seriously delinquent and at risk of foreclosure. The 8 months following, foreclosure activity continued to rise. This contributed to 'repeat' cases, which a mortgagee r received but was unable to keep up with modified loan payments.
The foreclosure inventory is suppressing what would otherwise be a rise in home prices in Maryland overall, as reported increases in the average selling price of 4 percent areas such as Baltimore are exclusive of distressed properties. This had many sellers waiting on the sidelines until prices improved, which contracted available inventory. The number of underwater homes in the state was also impacting homeowners' decisions to sell, as 23.5 percent of all homes in Maryland are mortgaged for more than the value. These underwater properties are at high risk of becoming distressed properties through short sale or outright abandonment, yet another supporting factor in Maryland's trend towards more foreclosures.
Buying Maryland Distressed Property in Baltimore, Laurel
The Baltimore-Towson metropolitan area is among the nation's top metro areas for foreclosure rates. Year over year, Greater Baltimore has seen a great surge in foreclosure activity. The number of homes sold month over month and year over year in Baltimore has recently decreased, although it is too early to call the decrease a trend based on data from traditionally slow months for home sales. The real estate inventory in the Baltimore area had an inventory reduction over February 2012.
However, the recent surge in foreclosure starts could prompt the inventory to move higher within the year, and may promote an increase in short sales - particularly appealing to investors and homebuyers who can pay cash for a distressed property.
The city of Laurel, in Prince George's County, had almost 200 foreclosure notices in 2012, a dramatic decrease from years past. Due to the low foreclosure rate, this area might not be on investors' radar but for one major benefit. In a bid to clear the inventory of foreclosed homes, many of which are REO and sitting vacant, as quickly as possible, the Laurel City Council passed a five-year property tax credit to owner-occupiers who buy foreclosed properties within the city limit. The credit is worth up to $3,500 per year.
According to the National Association of Realtors, the current median home price in Maryland is $233,700. Discounts on distressed property in Baltimore and surrounding areas could lead to short-term gains for purchasers who are able to act quickly in light of the increased competition for properties as more investor attention is drawn to Maryland foreclosures.