Sales of new homes in metropolitan Baltimore rose 14 percent during the first three months of the year, prompting expressions of hope that the recession in the regional homebuilding industry could be nearing its end.
Legg Mason Realty Group said builders sold 3,185 new homes in Baltimore City and Baltimore, Carroll, Harford, Howard and Anne Arundel counties during the first quarter. That compares with about 2,800 in the first quarter of last year and is more than double the rate to which sales sank during the fourth quarter of 1990, when only 1,568 new homes were sold, according to Legg Mason.
The first-quarter performance was the strongest since Legg Mason began calculating sales by its current method at the beginning of 1988, said Robert Lefenfeld, vice president of Legg Mason Realty.
"We don't necessarily expect sales to continue at this highly accelerated pace," Mr. Lefenfeld said. "However, this is hopefully a sign that the housing recession has bottomed out and that quarterly sales will stabilize over the 2,000 level for the rest of the year."
Mr. Lefenfeld said the first-quarter jump could be attributed in large part to the "pent-up demand" after two exceptionally slow quarters. He also cited builders' price cuts, declining interest rates and rising confidence resulting from the quick military success in the Persian Gulf war.
Nancy L. Smith, corporate secretary of the Ryland Group Inc. of Columbia, said the statistics are good news.
"It says the market is beginning to turn," she said. "I think it's beginning to happen."
Ms. Smith said Ryland, the leading homebuilder in the Baltimore market and one of the five biggest builders of for-sale housing in the nation, began to see its sales turn around in February, and she said the trend has continued into April.
She said that when Ryland reports its first-quarter earnings early today, the report will say that Ryland had more orders for new homes during the first quarter than in the same quarter of 1990. Ms. Smith said first-time home buyers appear to be leading Ryland's resurgence in sales. First-time buyers typically buy the least expensive homes.
Ms. Smith said it will be impossible to tell whether increased sales will help builders until accountants can figure out the profit margins. Since many builders have been cutting prices and offering incentives to move slow-selling homes, higher sales alone may not be enough to nurture the industry back to health, she said.
Legg Mason said prices of new homes have been "inching down" since last July. The median price of a new single-family detached home as of April 1 was $193,831, compared with $198,233 as of April 1, 1990.
The median price for condominiums was $93,567 this year, compared with $105,100 last year. Town houses showed the smallest year-to-year drop -- from $114,450 to $114,305 -- but the latter figure represents a steep drop from the $121,234 median price last July.
The median price of all homes actually increased over April 1 of last year, from $163,390 to $166,157, but that statistic is misleading, Legg Mason's announcement said. The increase reflected a higher proportion of single-family homes in the market now compared with last year, rather than any increase in the price of similar homes.
Meanwhile, the national housing market was also showing signs of a sales revival. The U.S. Department of Urban and Development said yesterday that sales of new single-family homes increased 1 percent in March, to a seasonally adjusted annual rate of 490,000 units. It was the second consecutive monthly gain.
The government said the increase followed a revised 18.6 percent gain in February, to a 485,000-unit pace. February sales were earlier reported up 16.2 percent at 467,000.
Despite the gain in new-home sales, the March sales rate nationally was still 12.3 percent below the year-earlier level.