Area home sales soar on 'euphoria' 'Worst is over,' analyst reports

July 31, 1991|By Edward Gunts

Sales of new homes in the Baltimore area during the first half of 1991 rose 14 percent from the same period a year before -- largely due to the burst of sales that coincided with the national "euphoria" following the end of the Persian Gulf war.

Sales of new detached homes during the first half of 1991 rose nearly 25 percent over sales during the same period last year, and sales of town houses and condominiums each rose 8 percent, according to a study by the Legg Mason Realty Group.

The number of new homes sold during the first six months of this year exceeded the number of homes sold during the preceding nine months of 1990, according to Legg Mason's report, Housing Market Profiles.

The 10 best-selling areas during the first six months of this year were: Edgewood-Joppa; Bel Air- Fallston; Crofton; Reisterstown-Owings Mills; Ellicott City; Elkridge; Perry Hall-White Marsh; Odenton; Columbia; and Stewart Corner.

"I think the worst is over," said Robert Lefenfeld, vice president of Legg Mason Realty Group. "We don't expect sales to go down to the levels we saw in the second half of last year."

At the same time, he said, "we are realistic enough to know there was a real pop [in sales] in the first quarter of 1991, and we don't see that pace continuing" for the entire year.

"The quote-unquote euphoria in March and April probably generated a higher degree of sales in the first half, and we'll probably pay for it in the second half," he said.

Mr. Lefenfeld and his associates said the increase in sales is also a sign that local builders are modifying their homes to make them more affordable to buyers.

Many builders, they said, are shaving their profit margins, reducing the size of the homes they build, and turning once-standard features such as fireplaces and decks into options as a way to lower the base price of a house.

"It's a recognition by builders of issues of affordability," said Fritzi Kolker, a Legg Mason senior associate. "They are restructuring their communities to introduce homes at prices the public wants to pay. . . . It's a buyer's market."

Legg Mason Realty Group studies the local housing market to monitor demographic trends and other changes that affect homebuyers and builders.

Its study, produced quarterly, includes all residential properties for sale in subdivisions of 20 or more units in Baltimore and in Anne Arundel, Howard, Carroll, Baltimore and Harford counties.

According to its latest report:

* 5,703 residences were sold in the first six months of this year, up 14 percent from the 4,981 sales in the first half of last year.

* 2,366 detached homes were sold in the first half of 1991, upnearly 25 percent from the 1,897 sold during the first half of last year.

* 2,264 town houses were sold in the first half of this year, up 8 percent from the 2,091 sold in the first half of 1990.

* 1,073 condominiums were sold in the first half of 1991, up 8 percent from the 993 sold in the first half of last year.

The average price of a home sold as of July 1 was $167,864, up from the average price of $165,612 for a home sold at the same time last year.

The average price for a detached home as of July 1 was $196,888,down from a July 1, 1990, figure of $199,150.

The average price of a town house sold on July 1 was $118,750, down from the year-before figure of $121,234.

The average price of a condominium sold as of July 1 was $95,175, down from the figure of $103,325 for a condominium sold on July 1, 1990.

The reason that the average price for all homes rose this year is that more homes in the most expensive category, detached homes, were sold in 1991 than in 1990. That made the average rise even though prices in each category declined, Mr. Lefenfeld said.

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