At last, sales really are looking up Optimism abounds, but some areas lag

March 14, 1993|By David Conn | David Conn,Staff Writer

It's after 5:00 on a chilly Wednesday afternoon, and John Toner couldn't be happier. He's on his car phone as he drives a couple of clients through a plush North Bethesda neighborhood.

"We're up to our neck in alligators," he shouts into the phone. "In fact, my main concern is to get more agents."

Mr. Toner is head of Buyer's Agent Real Estate, a company that represents prospective home buyers. His clients this day, the Harrises, are looking at homes in the $400,000 range.

The continuing fall in interest rates definitely has been a factor in their decision to buy a house now, says Karen Harris, a lawyer. "You're in a position where you can afford to buy more. It's a good time to look."

Not everyone in Maryland is as upbeat as Mr. Toner and his clients. In fact, the latest figures show that the state continues to lag behind many areas that are enjoying an undisputed recovery home sales.

But there has been enough good news, customer interest and plain optimism around here to convince many that housing sales, this time, are headed up.

Statewide, home sales in 1992 were up 8.6 percent compared with the year before, with an even more encouraging gain of 12.2 percent in the fourth quarter, according to the Maryland Association of Realtors.

Those looking to sell should be encouraged by the statewide 6.6 percent rise in the average price of a home last year.

Baltimore City saw a 4.7 percent gain, but average prices in the county fell 5.2 percent. The biggest increases by far were seen in the Southern Maryland counties, including Calvert, Queen Anne's, St. Mary's and Talbot.

More recent data show that the region still has a ways to go before housing can be relied upon to drive the economy out of its doldrums.

The Greater Baltimore Board of Realtors reported this month that although February home sales in the Baltimore region were up slightly compared with a year earlier, the total number of units pending sale -- reflecting more current market activity -- fell 27 percent last month compared with February 1992 (although Realtors point out that February 1992 was an extraordinarily active month).

The number of pending units represents those homes that consumers have agreed to buy but have not yet reached settlement on. They totaled 1,327 last month, down from 1,834 a year earlier, according to the Realtors.

"Right now, the level of activity is still not what it was at this time last year," said Chip Reichhart, who heads Maryland National Mortgage Corp.

Some national reports have shown home sales lagging so far this year. But the Wall Street Journal has reported that a leading indicator, the Mortgage Bankers Association's index of mortgage applications, has risen 65 percent since Christmas.

With Maryland 30-year mortgage rates down around 7.25 percent, "we've been seeing a pickup in both new purchases and a little bit in refinancings," Mr. Reichhart said.

But just as low interest rates and rising consumer confidence are goading some buyers back into the market, sharply higher lumber prices are making it more expensive to buy.

The lumber industry blames a surge in national demand and tight restrictions on Pacific Northwest forests for an increase in lumber prices of more than 50 percent since the start of the year.

Alex Sotir, a home builder, is happy to see any kind of pickup in demand at all.

"I'm infinitely more optimistic," said Mr. Sotir, who has a sign near his desk that reads, "I want to be around when it comes around."

"But I and a lot of others like me have had a helluva two years. . . . And we're a little bit reluctant to jump up and down."

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