Home sales in Montgomery County plunged more than 30 percent in the past fiscal year, with only 8,200 existing condos and houses changing hands between July 2007 and June 2008, compared to 11,927 the year before.
County budget experts say the number of sales was the lowest since the early ’90s.
The news comes as further evidence that wealthy Montgomery is not immune to the nation’s financial woes, and will face economic challenges through the remainder of 2008 and into 2009, budget experts said.
“We’ll see problems with how much we’re getting from taxes connected to home sales, but if there are lots of vacant houses with nobody living in them, that means they aren’t paying any other taxes either,” Montgomery Council President Mike Knapp said.
The county continues to face a budget gap of about $250 million for the coming fiscal year, according to numbers released Monday by Montgomery finance experts that show little change since July.
Although Montgomery’s unemployment rate crept up from 3 percent in July 2007 to 3.4 percent in July 2008, local officials say they aren’t worried about the slight increase. Montgomery continues to have the lowest unemployment rate in Maryland — far below the state average of 4.6 percent.
“There’s some reassurance that the bulk of what we’re seeing here in the county is concentrated in the housing market,” Knapp said. “If there are actions to take, we can focus them at least.”
Dennis Melby, president of the Greater Capital Area Association of Realtors, is pushing county officials to consider offering a 12-month, $1,000 tax credit for all first-time homebuyers, and a yearlong holiday from recordation taxes for people purchasing homes at the county’s median sale price of around $425,000.
The median home price declined as well for the first time in a decade, drooping 3.5 percent from $441,842 to $426,5421 between fiscal 2007 and fiscal 2008.
“There is nothing that is pushing consumer confidence up,” Melby said.
Some senior Montgomery officials said they need to figure out if credits and tax holidays would actually pay off in the long run.
Meredith Weisel, a lobbyist for the local Realtor’s group, urged county leaders to take action, and not hope the market would correct itself.
“Sometimes you have to put money out to get money,” she advised County Council members last week.
