Maryland?s immediate economic future may not be rosy, but it won?t be disastrous, economic experts say.
“I think homebuilding isgoing to come to a halt in the short term, but what?s going to hold up Maryland is the whole issue of base realignment,” said Deborah Ford, chairman of the Department of Economics, Finance and Management Services at the University of Baltimore.
Maryland is expected to gain 60,000 new jobs in the next few years as the Base Closure and Realignment and Commission beefs up Fort Meade and the Aberdeen Proving Ground.
Aris Melissaratos, Maryland?s secretary of Business and Economic Development, said BRAC?s impact might not be felt for years.
“BRAC is going to be a significant enhancer to the economy, but it won?t make a big difference until 2008 and 2009,” he said. “Real federal jobs will come in 2009, and the most will come in 2011.”
Home sales, which have been in a slump in recent months, could see a turnaround in the near future as mortgage interest rates decline. Mortgage-giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages dipped to 6.24 percent, down from 6.33 percent last week, the lowest level since March 2.
“We?ve probably seen the worst of the housing slump, although it may not have entirely bottomed out yet,” said Frank Nothaft, Freddy Mac?s chief economist.
But the immediate impact is being felt in lower transfer fee collections. Because homebuyers pay a 1.5 percent to 2 percent of their sales price in transfer fees, millions of dollars are being lost.
In the Baltimore metro region, the loss equaled between $400,000 and $1 million in October.
Metropolitan Regional Information Systems Inc. said $863 million in property was sold in October, down 19.85 percent from October 2005?s $1.07 billion. That means the state collected between $1.2 million and $1.7 million in fees last month, compared to between $1.6 million and $2.1 million in October 2005.
