No region in Maryland has been harder hit by the foreclosure crisis than Prince George’s County, and no neighborhood in the county has likely been rocked like the Retreat in Bowie’s Fairwood community.
In one four-block area, there are seven homes in various states of foreclosure, many others sit empty and others have sat with “for sale” signs on their lawns for months.
Between 2005 and 2006, as developers Rocky Gorge and K. Hovnanian Homes put the Retreat’s condominium-town houses on the market, they snagged many buyers with no-money -own loans that residents and Realtors now point to as the primary cause for the neighborhood’s fast-falling market values.
Neither developer returned calls for comment.
“We’ve hit the perfect storm in the Retreat,” said Kyle McCarthy, a Re/MAX One Realtor who’s trying to sell a condo there. “The area was overappreciated, then the subprime market tanked and financing alternatives were eliminated, and you still have developers flooding the market with inventory.”
That perfect storm has trapped Gene Pinder in his Maries Retreat Drive condo; after months of having his home on the market, he can’t find a buyer, despite having slashed his asking price to $485,000 from $535,000. If he goes lower, he won’t have enough cash to buy the single-family home he wants.
Pinder and other residents watched as speculators took advantage of the easy-to-get loans, and either turned the homes for a quick profit, or more recently got caught in the housing market’s sudden downturn.
“I’m surrounded by empty houses,” Pinder said, pointing out three on his short block that at times have been on the market. “It’s hard to get a decent price when flippers have busted the market.”
Until the subprime market collapsed in August, it was possible to buy a condo in the Retreat with no money down from the developer and flip it for a $100,000 profit or more and sometimes within a year, property records show.
An analysis of housing records doesn’t show any connection between flippers and the foreclosed homes. Most of those owners lived in their homes for about two years and likely got caught by rising interest rates they couldn’t afford, Realtors said.
“The majority of homeowners [in the Retreat] put no money down. … Now, it’s more than they can handle as rates are adjusting. They can’t refinance their mortgage and they can’t afford their mortgage,” McCarthy said.
“This is what’s happening across the nation,” said Fairfax Realty Inc. Realtor Joe Sugden, who’s trying to sell a Retreat condo. “People can’t say [they] didn’t understand the nature of the loan. They took advantage of a hot market.”
