Housing sales dropped dramatically in metropolitan Baltimore for the three months ending in September, compared to the same period in 1989, as markets for both new and existing homes slowed sharply.
"We've had eight strong years, and it's time," said Brandon Gaines, president of the Greater Baltimore Board of Realtors. "It's a consumer confidence thing . . . The trouble is that people can't look beyond the negative news," he said, citing reports about banks' real estate problems, tensions in the Middle East and fears of a general economic recession at home.
The Greater Baltimore Board of Realtors reports a 20.5 percent drop in the number of existing houses on which contracts were reached for the quarter. Many of the sales hadn't closed by Sept. 30 because buyers were still waiting for mortgage approval and tending to other details.
The drop in sales was concentrated in the latter months of the quarter, as existing home sales fell 28 percent in September and 24 percent in August, according to the GBBR. The data cover Baltimore City and Baltimore, Harford, Carroll, Howard and Kent counties, the area served by the GBBR.
In Anne Arundel County, whose figures are reported separately, the number of existing houses sold and settled fell 25.1 percent for the quarter, according to the Anne Arundel County Board of Realtors. The Anne Arundel Board doesn't track the homes sold but not closed.
Because there is often a gap of two or three months between when a home is sold and when a deal is closed, figures on sale contracts provide more up-to-date market information than settlement data. Settled deals fell 3.4 percent for the quarter in the GBBR's area, much less than the 20.5 percent drop in sales, because settlements complete deals made earlier in the year before the local market began eroding.
When Ann Arundel's totals are added in, the decline is 8.3 percent, from 6,656 to 6,105.
New home sales for the region -- including Arundel -- slowed even more. Legg Mason Realty Group Inc. reported that sales of new homes fell 35 percent to 1,683 for the third quarter, compared to the same quarter of 1989, as measured by the number of units sold in developments of 20 or more homes.
"Most every [region of the country] saw a decline in the third quarter," said Lawrence Horan, an economist and stock analyst who follows homebuilding companies for Prudential-Bache Securities Inc. in New York. "What's going on in the Middle East has moved consumer confidence much lower."
Nonetheless, the numbers are a departure for Baltimore's market, which stayed fairly stable through the first half of this year while national measures of real estate sales fell sharply and other East Coast markets from Boston to Northern Virginia suffered.
In the Baltimore area, excluding Anne Arundel, 1990 sales of existing homes outpaced 1989 through May and stayed even with 1989 through June. Sales in Anne Arundel dipped sooner.
New home sales in the region were basically flat during the first quarter and were down only about 5 percent during the second '' quarter, excluding Howard County, Legg Mason Realty vice president Robert Lefenfeld said. Howard's figures were excluded because its new growth controls distorted the figures with a decline reflecting those limits as well as a weakening of the market.
Prices so far have stayed stable in the Baltimore area, outperforming other northeastern markets where prices have gone down. The GBBR says that the average price of homes in the area it serves was $121,404, up only 2 percent from September 1989. The Anne Arundel County Board of Realtors reports that the average house in that county sold for $151,254 in September, off about $800 from a year earlier.
New home prices throughout the region are also virtually flat, Mr. Lefenfeld said. The average base price of new homes fell by 0.4 percent in the third quarter, to $182,259, counting only developments that have been on the market in both the second and third quarters, Legg Mason's figures show.
Even real estate brokers, an optimistic breed by nature, predict that Baltimore home sellers are in for a rougher time and more downward pressure on asking prices over the next several months.
"Maybe this is the pendulum swinging" after years of strong appreciation in housing, said Elaine Northrop, a broker with Coldwell Banker in Howard County. "I don't think it will stop here. I think prices will move lower. . . Buyers are going out there looking to steal something."
Several observers said "moderately" priced homes are still selling fairly well, with definitions of moderate price ranging up to about $150,000. Mr. Lefenfeld said sales of new homes are stronger in lower price ranges; Mr. Gaines, the GBBR president, said the same is true of existing homes.