MAY 2015
Mortgage rates, fewer listings mean buy now Lower Shore region reflects national home sales trend
LEGISLATIVE BREAKFAST Members of the 2015 Coastal Association of Realtors Government Affairs Committee were hosts to the Lower Shore’s representatives in the Eastern Shore Delegation at CAR’s annual Local Legislative Breakfast on Tuesday, April 28, at the Wicomico Youth & Civic Center. Attending, from left, are Darron Whitehead, Del. Carl Anderton, Del. Charles Otto, Del. Johnny Mautz, Linda Moran, Sen. Jim Mathias, Sen. Adelaide Eckardt, Joe Wilson, Jamie Wetzelberger, Joel Maher, Wesley Cox, Vicki Harmon, Devin Holland, Del. Mary Beth Carozza, Brandon Johnson, Steve Cohen, Michael Weisner, Laurie Crawford, Del. Chris Adams, and Del. Sheree Sample-Hughes. Story on page 20.
Realtors get flood insurance update Major changes in program mean client education will become part of mission
BERLIN, MD – Upcoming significant changes to Ocean City’s flood maps have local Realtors preparing to educate their clients on the importance of flood insurance, regardless as to whether it is required. Reese Cropper, president of Insurance Management Group Inc. of Ocean City, presented “April 2015 Flood Insurance Changes – Effects on Realtors and Their Clients” to several members of the Coastal Association of Realtors (CAR) last month. Cropper described how Ocean City’s flood maps are changing – most oceanfront property is moving from a high-risk flood zone to a lowrisk flood zone – and how these changes could affect local real estate. “In recognition of beach replenishment that aims to protect the town during major weather events, much of Ocean City is being downgraded to
Reese Cropper III explains new policies for flood insurance.
a low-risk flood zone by the National Flood Insurance Program (NFIP),” Cropper said. “In these low-risk zones, flood in-
surance may not be required by mortgage lenders, and our concern is that if it’s not required, property owners won’t buy it and much of Ocean City will become uninsured.” Every property, despite its proximity to a body of water, is located in a flood zone and is subject to flooding, Cropper added. Linda Moran, president-elect of the CAR Board of Directors, said she maintains flood insurance for her Berlin home for many reasons. “Even though my home is not waterfront, I’ve got flood insurance because what if, perhaps, my neighbor’s septic system overflows onto my property and causes flooding in my home,” Moran said. “Flooding is not unique to hurricanes and other weather events.” According to Cropper and Tim Swartz, vice president of Insurance Management Group, new flood maps are not their only concern regarding changes to the NFIP. As of January 2014, Cropper said, See FLOOD on page 20
BERLIN, MD – A national trend that reflects limited inventory impeding overall sales numbers is beginning to crop up on the Lower Shore, and local Realtors are encouraging potential sellers to take action now while competition and mortgage rates are low. March 2015 housing statistics from the Coastal Association of Realtors (CAR) – which represent the activity of CAR’s more than 1,000 Realtor members in Somerset, Wicomico, and Worcester counties – reflect decreases in listings, contracts, and settlements. Compared to the same time last year, single-family home listings across all three counties decreased by 2.2 percent in March. Condominium listings decreased by 3.8 percent. Contracts, or pending sales, for single family homes and condominiums in all three counties decreased by 20.9 percent, and settlements decreased by 8.4 percent. According to the National Association of Realtors (NAR), existing home sales would be much higher if it wasn’t for negative equity overhang. Too many homeowners, NAR experts say, still lack sufficient equity in their homes to sell. Homeowners who have equity below 20 percent are less likely to sell because they may not be able to cover the costs of the transaction. About 35 percent of homeowners nationwide are either in a negative equity position or have equity below 20 percent. Lawrence Yun, NAR chief economist, said factors like recent solid gains in pending sales, a steadily improving labor market, and mortgage rates hovering around four percent, as well as the likelihood of more renters looking to hedge against increasing rents, should boost the industry this spring and summer. “However, the underlying obstacle – especially for first-time buyers – continues to be the depressed level of homes available for sale,” Yun said. “Realtors are reporting severe shortages of move-in ready and available properties in lower price ranges. The return of first-time homebuyers this year will depend on how quickly inventory shows up in the market.” NAR experts say a limited number of homes on the market will help sellSee MORTGAGE on page 20