As spring ushers in real estate's most active period, market conditions will remain favorable for buyers, realty agents predict.
Interest rates are still low and prices reasonable. And the recent increase in home sales, combined with the onset of the traditional buying season, is prompting many owners to put their homes up for sale, adding fresh inventory to the market.
"People who were holding back from putting their homes on the market are feeling more confident and seeing that this is a good time to act," said Nancy Hubble, vice president of the Greater Baltimore Board of Realtors and a partner with W.H.C. Wilson & Co.
The number of new listings in the greater Baltimore area rose to 4,138 in March, 17 percent more than a year ago, according to the Greater Baltimore Board of Realtors. At 1,880, the total number of units whose sale is pending in greater Baltimore was up 7 percent for that same period, according to the Greater Baltimore Board of Realtors.
"Inventory has been increasing slightly, and a lot of the homes that have been around for a while have sold," with new homes taking their places, said Arthur Davis, a real estate agent with Chase Fitzgerald & Co. Inc.
Many recent buyers have found an adequate supply of homes on the market. After six weeks of house-hunting late last year, William and Judy Lyon faced a choice of three appealing houses, all in their price range of $100,000 to $130,000.
"We saw a fair amount of homes that would have suited our needs," said Mr. Lyon, the rector of Saint Mary's Episcopal Church in Hampden. The couple eventually picked a Baltimore town house.
Elissa Golin and Simeon Goldblum hunted for a year before they found a Pikesville rancher in their price range of $200,000 to $250,000 last January. They postponed putting their Mount Washington house on the market until they located a home. "We figured it would be easier to sell our house than to find a new one," said Ms. Golin, who recently gave birth to the couple's second child. Their home is now up for sale.
The couple's difficulties resulted from a shortage of homes in the $200,000 to $250,000 range in Pikesville, according to Harriett Wasserman, a real estate agent with the Pikesville office of Prudential Preferred Properties.
"People are coming out of $100,000 homes and they think with $250,000, they'll be able to get whatever they dream of," she said, noting that buyers are often surprised that in today's market, such scarcities exist. "But they can't, at least not in Pikesville." Many choose to move to Owings Mills instead.
Still, most buyers can find homes fairly quickly, Ms. Hubble said. She estimated that the typical search lasts from four to six weeks.
Apart from growing inventory, buyers venturing out this spring will find realistic prices. After declining last year, home prices have stabilized at rates that are far more reasonable than those of the 1980s, said Mr. Davis of Chase Fitzgerald. And many builders, including Ryan Homes and Landmark Homes, are constructing smaller, more affordable houses to meet market needs.
Statistics from the Greater Baltimore Board of Realtors showed an increase of 3 percent in the average price of a home in March over a year ago, an insignificant jump considering that prices dropped the previous year, Ms. Hubble said.
She said that a Guilford home that might have sold for $450,000 in 1989 would now sell for $395,000. "Everyone's being much more realistic on asking prices," said Mary Bell Grempler of Grempler Realty Inc.
Interest rates, which are hovering around 15-year lows at 8.5 percent (with two points) for a 30-year fixed-rate mortgage as of mid-April, are also working in buyers' favor. "We'll continue to see fairly stable low interest rates throughout the year," Ms. Hubble predicted. A considerable percentage of those who begin house-hunting this spring are expected to be first-time homebuyers, despite the apparent demise of President Bush's proposed $5,000 tax credit to these buyers.
"We've seen a larger percentage [of first-time homebuyers] this past year than in previous years, and I think that trend will continue," said Mr. Davis.
He noted that "a lot of people start looking for a house after they pay their taxes and realize that the only deduction left is housing."
Because more buyers are entering the market, people may have to act more quickly than in the past to nab a dream house, say realty agents. "The buyer needs to go out there and continually look, so that when a house comes on that meets his needs, he won't hesitate," he said.
"We're starting to see houses that, if they are well-priced, sell almost immediately."
Though the days of "hysteria" are gone where a house drew many bids, "we've had people who put in bids and they're losing houses because other people have bid on them," Ms. Hubble said.