Town houses outsold detached homes in '90

March 10, 1991|By Edward Gunts

Although most local homebuilders saw a drop in sales last year as a result of the economic downturn that hit Maryland, the town house market proved to be the most resilient to the sales slump.

New town houses outsold new detached houses in the Baltimore area last year -- the first time that's happened since analysts at the Legg Mason Realty Group began monitoring sales in 1985. That's a sign that many buyers in the market during the downturn were seeking affordable, "entry-level" housing rather than more luxurious "move-up" housing.

"Everything was down, but town houses were down the least," said Robert Lefenfeld, vice president of information services for Legg Mason Realty.

"The heart of the market is below $200,000," said Jerry Doctrow, vice president for research services. "What gets hurt most in a recession is the upper end."

Other findings of Legg Mason's quarterly Housing Market Profiles report: New home prices either remained steady or fell slightly in almost all parts of the region. Although the sales pace deteriorated, builders continued to open new projects. And the two top-selling homebuilders remained Ryland Homes and Ryan Homes.

Statistics compiled by Legg Mason showed that 1989 was the first year that traditional, suburban single-family detached houses did not account for at least 50 percent of all new home sales in the Baltimore market. But 1990 was the first year that the volume of town house sales exceeded the volume of detached house sales.

According to the latest Legg Mason report, 3,431 town houses were sold in 1990 for a 42 percent share of new home sales, 3,136 detached homes were sold for a 38 percent share and 1,665 condominiums were sold for a 20 percent share.

In the fourth quarter of 1990, town houses made up 46 percent of the new home sales, while detached homes accounted for 37 percent of the sales and condominiums accounted for 17 percent.

In 1989, by contrast, 3,848 detached homes were sold for a 39 percent share of the market, compared with 3,821 town houses sold for a 38.8 percent share of the market. Condominium sales accounted for the remaining 22 percent.

"Long-term demographic trends point to a de-emphasis on town houses as the baby boomers mature and move up into larger detached homes," Mr. Lefenfeld said. "However, in the short term, the larger inventory of affordable products . . . allowed the town house market to sustain the uncertain economic climate better than the more expensive detached market and the limited multifamily market."

Sales trends largely reflected the kind of people still in the market for new houses when the recession hit Baltimore in the second half of 1990, Mr. Lefenfeld noted.

Many buyers in 1990 were young singles or couples moving out of rented apartments or their parents' houses and becoming homeowners for the first time, he said. Meanwhile, move-up buyers who would typically be purchasing more expensive detached houses hesitated to make a move as a result of the recession and the Persian Gulf crisis.

"Affordable products were able to find a stronger market for 1990 because they were catering to a market niche that wanted to move into homeownership and was able to see beyond the economic downturn," he said. "It's the town house as an entry-level product that was really leading the charge. It's the affordable option for becoming a homeowner."

Legg Mason Realty Group is one of the few companies in the area that studies the market to monitor demographic trends and other changes that affect homebuyers and builders. Figures for 1990 are based on information compiled by Housing Market Profiles project director Kate Weglein, with sales statistics supplied by the builders themselves.

The study includes all active for-sale residential properties in subdivisions of 20 or more units, in Baltimore City and in Anne Arundel, Howard, Carroll, Baltimore and Harford counties. It does not reflect construction and leasing of apartments.

Legg Mason's companion list of the 20 top-selling subdivisions reflects sales of active "conventional" subdivisions in which houses are built and sold without federal subsidies.

Legg Mason's study showed that 8,232 new homes were sold in 1990, a 16 percent decrease from the 9,836 new homes sold in 1989. Sales were down in all counties except Anne Arundel.

Although the sales pace slowed in 1990, builders continued to open new projects. According to Legg Mason, 207 new projects opened during the year and 132 projects sold out or were closed, giving the region a net gain of 75 projects.

Twenty-five percent of the new projects that opened in the area in 1990 were in Anne Arundel County, mostly in the Odenton-Crofton area. With the help of those projects, Legg Mason said, that region's sales increased from 1989 to 1990.

Other strong markets included Northwest Baltimore and the Edgewood-Joppa region of Harford County. Sales fell significantly in Howard County and the Bel Air-Fallston area.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.