Home construction bounces back slowly

UNEVEN RECOVERY

May 06, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

The homebuilding industry in the Baltimore region is undergoing an anemic and uneven recovery -- with Howard and Baltimore counties lagging behind other parts of the region, Robert Kleinpaste, president of the Legg Mason Realty Group, told local homebuilders yesterday.

"The pain is done; the recovery is under way," said Mr. Kleinpaste, who was one of three speakers yesterday when the Home Builders Association of Maryland held its annual economic outlook conference.

"As recoveries go, this has been unusually weak," agreed Michael S. Carliner, an economist for the National Association of Homebuilders and a speaker at yesterday's conference.

He said that economic recovery in the Baltimore area is trailing that of the Washington area and warned that a shortage of buildable lots -- because of financing limits for land developers -- could become a serious problem in all parts of the region.

"We're certainly coming out of the throes of the recession, but it's not going to be as robust a recovery as we had projected," said Peyton Herbert, a vice president of the Mercantile Mortgage Corp. in Baltimore.

Mr. Kleinpaste predicted that permits issued for new homes in the Baltimore region would reach 15,000 in 1993, compared with 14,500 in 1992 and 10,665 in 1991.

Still, he said, Baltimore County, a core producer of new homes in the past, has been trailing other parts of the region in housing-start growth.

"Baltimore County is a county that worries me," Mr. Kleinpaste said.

Howard County "has been producing housing units at half the rate [as it previously did]," Mr. Kleinpaste said. The imposition of limits on new-home permits by Elizabeth Bobo, the former Howard County executive, was responsible for a slowdown in new home production there, as is the decline in the availability of buildable lots in the county, he said.

The county doing the best job of producing new homes, "due to careful planning," is Anne Arundel, in Mr. Kleinpaste's view. Anne Arundel has produced more buildable lots than has either Howard or Baltimore counties in recent quarters, he said.

Mr. Kleinpaste said that the new-home market has become extremely sensitive to swings in consumer confidence and that many white-collarworkers -- in counties such as Howard and Harford -- continue to be nervous about their job security.

"I'm losing my ability to explain these things," Mr. Kleinpaste said of the fall in consumer confidence that occurred between the fourth quarter of 1992 and the first quarter of this year.

The performances of Harford and Carroll counties were somewhere in the middle in producing new housing units in recent quarters, Mr. Kleinpaste said. Baltimore City, which normally produces few new homes each year, was not the focus of much forecasting at yesterday's conference.

At the national level, Mr. Carliner predicted an improved trade-up market as baby-boom age homebuyers seek to realize housing dreams that they have suppressed for several years because of financial caution.

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