Md. housing market is 'warming' Baltimore-area sales rose 16% in Nov. REAL ESTATE

December 13, 1992|By Ellen James Martin | Ellen James Martin,Staff Writer

Homebuilder Manning Klepsig can easily spot a true "looker. And these days, he's encouraged by the number passing through his Harford County models.

The wrong kind of browsers are often neighborhood folks who tour models to entertain themselves, satisfy their curiosity or get decorating tips. Others, out for a Sunday drive, pass by a model home and decide to walk through.

The right kind of lookers? They come from longer distances, bring their spouses along and often have a real estate agent in tow. That's who he's seeing now, following two extremely

difficult years with few serious customers.

"After eight quarters . . . down, I honestly believe the market is coming back. I see more prospective customers coming through and I think in the spring it will be even better," said Mr. Klepsig, a small builder based in Churchville.

The market for new and resale homes in Maryland could hardly be considered "hot," but analysts and industry executives say it pTC warming. Still, no one is talking about a return of the explosive 1980s.

"For many [realty] companies, November of this year was the best month in the history of their businesses. Obviously, that's good news, and I think it bodes well for the winter and into the spring," said Fletcher Hall, executive vice president for the Greater Baltimore Board of Realtors.

Sales of new and used homes in the Baltimore area rose 16 percent in November, the strongest signal of improvement in a couple of years, industry officials said. Sales under contract in November increased 19 percent, the realty board reported.

The strongest market segment: new homes. That's because relatively few homes have been built in the last couple of years, due to restraints on bank credit for builders.

"The inventory of homes has dwindled substantially for the new home category. And people want new homes," said Nancy Gainer, president of Market Specific Sales Training Inc., a Columbia-based business that consults with builders on their marketing programs.

There's also some optimism, however cautious, in Maryland's commercial real estate market.

A glut of space -- from offices to retail strip shopping centers -- began bringing values down steeply in mid-1989. But with construction virtually halted in many categories of commercial property, supply and demand are moving closer in sync in many markets.

"As a broad picture, I see improvement," said Andrew J. A. Chriss, a vice president at Manekin Corp., a Baltimore-based commercial development and brokerage firm.

There are no longer large blocks of vacant office space in such key markets as Owings Mills and along the I-270 corridor in Montgomery County, says Mr. Chriss, who serves as president of the Greater Baltimore Board of Realtors.

Meanwhile, Columbia Management Inc., a Rouse Co. subsidiary, says the office vacancy rate for its 1.5 million square feet of space in downtown Columbia has fallen from 18 percent in 1991 to 11 percent.

Fourteen of Rouse's tenants in downtown Columbia are expanding, says Darrell Nevin, group leasing manager for Rouse. And Ryland Corp. this year decided to lease all of its new Columbia headquarters building instead of just 75 percent as previously planned.

Still, troublesome pockets remain.

Some commercial markets in the Baltimore area may not bottom out until 1995, says David J. Downey, an assistant vice president at W.C. Pinkard & Co., a commercial real estate brokerage in Baltimore. In the downtown Baltimore office market, for example, vacancies are still running around 20 percent. That's no higher than 1991, but it's well over vacancy rates during the 1980s.

Other troubled commercial markets: the Baltimore/Washington International Airport area and the outskirts of Columbia. Both have catered to defense contractors that have shrunk along with the U.S. defense budget.

Said Mr. Downey, "The moral of the story is that total recovery is still a ways away. But hopefully, we'll be hitting bottom and starting to come back up soon."

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