Allegany County housing shortage impacts 'everybody'

May 13—CUMBERLAND — Erica Johnson talked of workers in temporary and travel positions who left their Allegany County jobs this year because they couldn't secure housing.

Some traveling nurses, equipment operators and construction workers reside at local campgrounds because they "can't find a place to stay," she said.

A lot has changed in the area's real estate market since 2019, said Johnson, executive of the Historic Highlands Association of Realtors that represents more than 150 real estate professionals and individuals in related businesses that impact the industry across the tri-state area.

Today, a local house listed for $100,000 or less typically needs too much work and won't appraise for a standard Federal Housing Administration or Department of Veterans Affairs mortgage, she said.

"There were so many more opportunities to buy," Johnson said of three and four years ago as compared to today.

Now, "there is just not enough inventory," she said of the lack of houses for sale.

The cost to rent a local apartment or house is often "higher than your average house mortgage," Johnson said.

Fed actions

A big reason for the low housing inventory dates to 2020 when the Federal Reserve dropped its benchmark interest rate to essentially zero, saying it expected the move to help the economy.

That led to super low mortgage interest rates for homebuyers.

More recently, the Fed raised rates saying the action would curb inflation.

But many homeowners who got a low mortgage rate a couple of years ago can't afford today's 6% to 7% rates, so they stay in their existing house rather than listing it for sale to buy something else.

In the current financial environment, local houses that are extremely overpriced end up "sitting on the market for an extended period of time," whereas homes priced reasonably sell "before the contract can even be listed," Johnson said.

Financial distress

While many of the local houses for sale are much more expensive than they were a few years ago, most area buyers haven't experienced a salary increase.

"It just doesn't even out. There's no scale to it," Johnson said.

According to a U.S. Bureau of Labor Statistics report Wednesday, housing costs in April were the biggest contributor to inflation data for the second month in a row.

Moody's Analytics earlier this year reported that the rent-to-income national average "reached 30% for the first time in our 20+ years of tracking history," and was up 1.5% from a year ago.

"Rising mortgage rates caused many households to be priced out from home buying and would-be buyers to remain renters," the organization reported. "Apartment demand surged as a result and drove rates sky high."

As the disparity between rent and income growth widens, Americans' "wallets feel financial distress as wage growth trails rent growth," Moody's reported.

'Important job'

The local real estate market also faces an additional problem when it comes to environmental hazards.

Some houses are located in a Federal Emergency Management Agency flood zone.

"We have a lot of that around here (and) in West Virginia as well," Johnson said and added that monthly flood insurance for a house in a risky zone can cost roughly the same as a mortgage payment.

Realtors should be involved in real property transactions, Johnson said.

"They have a very important job," she said of Realtors. "They have to make sure that they touch every aspect for the buyer and the seller on each listing."

In a dream scenario, grant money and manpower would be made available to build more houses now on Allegany County land, Johnson said.

"As Realtors ... we would be able to list those houses and get them filled in no time," she said.

The market woes extend to Realtors as well because they are commission-based, Johnson said and added that some agents today must work an additional job to survive financially.

"It's not just the buyer and seller," she said of people impacted by the real estate market conditions. "It's everybody."

Employers impacted

Local employers need more housing for their workforces, Matt Miller, executive director and president of the Cumberland Economic Development Corp., said recently.

"They will tell you there's a huge need for it," he said and added that 60% of the city's housing stock predates 1939.

"That's a telling number ... a serious issue that needs to be addressed," he said.

"We've been hearing from our employers for a long time," said Stu Czapski, economic development specialist for the CEDC, and former executive director of the Allegany County Chamber of Commerce for 10 years.

There's a significant need locally for reasonably priced housing, he said.

While companies including Hunter Douglas and ClosetMaid plan to leave the area, Pilgrim's in Moorefield, West Virginia, is partnering with Premier Homes and Development to construct a $14.8 million apartment complex that will expand housing options for the company's employees.

Too high

"There really is a housing crisis going on," Maryland Realtors President Yolanda Muckle recently told the Times-News.

Maryland is short 120,000 housing units, she said and added that many homes currently cost too much, and there are too few of them to buy.

A Maryland Realtors 2023 housing poll shows 76% of voters said the cost to buy a house in the state is too high.

Typically, a lender won't issue a mortgage for more than a house's appraisal, but some buyers use cash to make up the difference.

But if a buyer isn't looking to stay in a house for at least five years, "it doesn't make sense to pay above appraised value," Muckle said.

As another way to help alleviate the housing crisis, Maryland Realtors advocates for zoning changes that would allow accessory dwelling units, also known as "granny flats" or "in-law suites."

Additionally, many areas have vacant commercial properties such as shopping malls that could be converted to residential housing, Muckle said.

"They already have the parking lots, the water," she said of necessary infrastructure.

Developers decide

Some projects are planned to build more housing but they won't come to fruition anytime soon.

The CEDC owns property slated for at least 200 residential units, including townhouses and apartments, to be built on the former Memorial Hospital site in South Cumberland.

Roughly 40 rental apartments will be part of the Baltimore Street revitalization project.

And Allegany County officials have discussed plans for a residential subdivision at the site of the former Allegany High School that could include single-family houses and townhouses.

"It will be up to the developers," Allegany County Administrator Jason Bennett said last month.

"We will take whatever the developers recommend and think they can sell," he said. "We obviously need the housing."

Teresa McMinn is a reporter for the Cumberland Times-News. She can be reached at 304-639-2371 or tmcminn@times-news.com.