Real estate agents see light at end of tunnel

October 20, 1992|By Kim Clark | Kim Clark,Staff Writer

Louis I. Wachter has been selling real estate in the Baltimore area for 40 years, and though sales have been soft this year, he says he's not worried. The reason: "Pent-up demand."

Mr. Wachter, one of about 1,200 Baltimore-area agents who attended the Greater Baltimore Board of Realtors annual convention yesterday, said that now that people have had a couple of years to pay off debts and with interest rates very low, he's starting to see a rebound in demand for lower-priced homes.

But it is just a start, and the Realtors and exhibitors gathered at the Baltimore Convention Center yesterday said the recovery, though real, is spotty.

Jonathan A. Melnick, a Baltimore auctioneer for the past 18 years, said his business is booming.

But even housing auctions are taking longer these days. During the 1980s, Mr. Melnick would get a house to sell, advertise it for two weeks and then put it on the block.

These days, it takes six to eight weeks of advertising a house auction to gather enough interested buyers, he said.

Robert T. Kleinpaste, president of the Legg Mason Realty Group, told the Realtors that his company's surveys show that new-home sales, an important leading indicator, have begun to rebound.

"The bottom has been achieved," he said. "The recovery is under way."

And lower-priced homes are selling briskly.

But the rest of the industry will have to wait at least a year for good news, he predicted. "The middle range [homes costing between $200,000 and $500,000] is stopping and starting," he said.

And there is still an abundance of older homes for sale.

Although there are signs of an industrial recovery, orders for new factory space probably won't show up until sometime next year.

And there is a glut of office space. Mr. Kleinpaste figures it will take five years of economic growth to use up all the empty office space in the area.

One of the biggest problems facing Realtors: Lenders have toughened rules so much that they are making it difficult to sell houses, Mr. Kleinpaste said.

Mortgage company officials at yesterday's convention conceded that they require many more documents from applicants but said they are forced to do so because of the high default rate.

Nelson Bayne, a local officer of Louisville, Ky.-based Great Financial Mortgage Corp., said he now requires loan applicants to provide copies of things like past deeds and titles to automobiles -- things he never thought about requiring just a few years ago.

"It is more paperwork, but it saves the consumer trouble," he said.

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