Home sales dipped from Dec. to Jan. 'Mysterious' drop dampens optimism

February 28, 1992|By Ellen James Martin | Ellen James Martin,Staff Writer

Sales of previously owned homes took a dip in January at both the national and local levels, --ing the hopes of the real estate industry that the market had recovered.

"It's all very mysterious. We had really expected the numbers to be much higher than they were," Liz Duncan, a spokeswoman for the National Association of Realtors, said yesterday.

The trade group reported that sales of existing homes in the United States fell 1.5 percent in January, compared with December, to an annualized rate of 3.22 million units, the first decline in four months. All regions of the country except the Midwest reported declines.

Working with a slightly different set of statistics, the Maryland Association of Realtors reported yesterday an 18.4 percent dip in the resale market in January. The number of sales contracts that closed on existing homes in Maryland dropped to 2,406 last month, the group said.

Low consumer confidence and a rise in mortgage rates in mid-January were blamed for the national and local sales declines.

"Consumer confidence is not coming back as fast as we thought it would," said Pierre Vining, a Calvert County appraiser and president of the Maryland Association of Realtors. "People are still kind of nervous about employment, because it's reached the point where most of us know someone who has lost a job."

An informal poll of real estate brokers across the state last month indicated that his group felt a recovery was under way in the resale market, Mr. Vining said. But the new statistics have proved the group wrong, he said.

"It just seemed as though we were on the verge of breaking out into the sunshine. But now it looks like that may be a month or so away," he said.

After falling to 8.23 percent in early January, a 17-year low, the average interest rate on 30-year, fixed-rate mortgage crept up to 8.68 percent at the end of the month according to the Federal Home Loan Mortgage Corp.

Dorcas Helfant, president of the National Association of Realtors, cited the January rise in mortgage rates as a possible explanation of why homebuying didn't increase as expected last month.

"People are funny. A lot of them are sitting and waiting until interest rates go down again," she said.

Ms. Helfant said she found some comfort in the 12.6 percent rise in resales nationwide when compared with January a year ago, even though January 1991 was a particularly weak month for sales because of the Persian Gulf war.

Maryland fared worse in the January-to-January comparison with a decline in resales of 2.28 percent.

(The national statistics for resales are seasonally adjusted and include both settled and pending sales. The Maryland numbers are not seasonally adjusted and include only sales that have closed. The state numbers also include sales of condominiums, which the national numbers do not.)

At T. Rowe Price Associates Inc., economist Paul W. Boltz cautioned against reaching any conclusions based on a month's data. "One number does not make a trend," he said.

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