Home prices in the Cumberland, Md. metro area, which have been rising steadily for years, shot up a startling 21% in the first quarter compared to the same period a year ago, according to the latest National Association of Realtor report. The price increase in the Cumberland metro, which includes Allegany County, Md. and part of Mineral County, W.Va., was the biggest in the nation.
Turns out that this section of Appalachia, which has seen its manufacturing industry fade in recent decades, is actually holding up relatively well. The area is home to Frostburg State University, which has more than 5,000 undergraduate and graduate students, and three large prisons. In this recession, prison jobs have been among the most recession resistant. The Utica area, another hub for prisons in upstate New York, also has had usually stable home prices.
Home prices in Allegany County increased 28% in the first four months of this year compared to the same period in 2008, according to Marty O’Toole, broker at Century 21 Potomac West in Cumberland. From January through April,141 homes sold compared to 145 homes last year. In Mineral County, which is also part of the metro area, home prices jumped 17%.
O’Toole said the median price likely increased, in part, because more homes above $400,000 sold this year.
“People cringe when you first say ‘prison,” O’Toole said. “But when they come in, they help a community. Prison jobs pay well, especially in for a rural area like the one we’re in. And it’s also the materials prisons purchase. They buy bread, milk and other food locally.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.