Rebound in residential real estate?

April 14, 1992

Could there be a rebound afoot in housing? A growing body of statistical and anecdotal evidence suggests that the long chill in sales may be starting to thaw.

Existing home sales shot up 9.3 percent in February -- the biggest monthly leap in nine years -- and again in March. The Commerce Department estimates housing starts jumped 9.6 percent during the month.

The local picture looks even more promising. The Greater Baltimore Board of Realtors reports settlements are up 27 percent region-wide. That includes Baltimore City, where deal closings have been stagnant for better than a year.

The question is whether the current uptick will peter out like last spring's much-publicized mini-boom. A rise in mortgage rates remains a danger, as does a big jump in home prices. Too, there's the chance that the surge in sales is just seasonal.

Even if it isn't, no one is billing this turnaround in housing as the engine that pulls the economy out of recession. The numbers don't portend the kind of buying surge that accompanied the 1983 housing rebound. Then, housing starts skyrocketed 65 percent and existing-home sales jumped 37 percent over the year before. Today, even the most optimistic forecasts anticipate a 20 percent increase in starts.

Still, any sign that the malaise in real estate may be abating qualifies as welcome news. Local governments and school systems have been savaged by slipping property values and attendant drops in tax receipts. Stagnant and deteriorating home values have done a number on the consumer psyche.

It's early yet. But this rebound, if it sticks, could be the shot in the arm the local and national economies so badly need.

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