It's a tough summer, home sellers lament Job insecurity, market glut cited

July 18, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

Several days a week, Kevin Willey stops by a cedar-sided Colonial in Columbia to turn on the taps and to water the scorched grass. Minding a vacant house was not what he had in mind for this summer, but for some reason his nearly new home just won't sell.

"The thing that's appalled me is that I've had plenty of lookers but no offers. I don't know what to do any more," said the 31-year-old Mr. Wil ley, who makes a gesture mimicking a meat cleaver on his dining room table to express his frustration.

Although he's cut the price of his virtually spotless property well below similar homes in the same neighborhood, the 5-year-old home just won't move. This is despite the fact that it is now priced at $178,900, while similar homes in the neighborhood have sold at prices in excess of $200,000 in the recent past.

"It's a tough summer," acknowledged Lynn Sherrock, an agent for RE/MAX Advantage Realty in Columbia, who has had the listing on the property for six months and has actively marketed the place. Many prospective buyers have seen Mr. Willey's cedar Colonial, but it's tough turning shoppers into buyers this summer, the agent noted.

With interest rates at a 20-year low, sellers like Mr. Willey, a Navy computer analyst, see every reason for buyers to react positively. Yet while some properties on the market this summer are being snapped up by opportunistic buyers, others have languished for months unsold. Liquidating property is proving an uneven, chancy proposition this season, and August is not expected to be any better.

"Buyers are not reacting to the low mortgage rates," said Fritzi Hallock, a senior associate with the Legg Mason Realty Group in Baltimore. "People are not eager. They don't feel any urgency about making a decision because they think there's always a better deal out there if they just wait."

The mentality of a buyers' market -- where the number of homes available exceeds demand -- is one drag on the summertime market in the Baltimore area. Another is the wavering consumer confidence, which most real estate analysts link to fears about job security.

"I still think there are concerns about where the economy is going. I still think some people are taking a wait-and-see attitude regarding employment," said Fletcher Hall, executive vice president of the Greater Baltimore Board of Realtors.

In fact, the time it takes to sell a home seems to be getter longer. In 1987, among homes that sold in the first half of the year, 18.9 percent sat on the market for more than 90 days. That percentage has been increasingly steadily, and in the first half of this year, 32.8 percent were on the market for more than 90 days until they sold.

To be sure, there have been bright spots in the summertime real estate picture.

Comparing last month with June 1992, the Baltimore-area realty board reported an upturn in sales -- 21 percent for pending sales (contracts placed on homes) and 4 percent for settled sales. And the Anne Arundel County Association of Realtors also reported increases in June -- 15.3 percent for pending sales and 14.6 percent for settled sales.

Still, economists who track the local real estate market believe the sales surge in June was associated with a temporary release of pent-up demand for housing by those needing to buy and settle on their properties in the early summer so their children could be at their new schools by September.

"The month of June was created from the pressure of those who must move," said Robert Kleinpaste, who heads Legg Mason's realty group, which tracks the new-home market in the metropolitan area. Once pent-up demand from must-movebuyers has been spent, the market will flatten again, he predicted.

All of this is not to say that this summer's market is expected to be no better than the ones real estate agents have toughed out in recent, recessionary years. The disappointment comes from the fact that the market -- which seemed poised for a significant recovery this summer -- has not been ignited as hoped by a somewhat improved economy and bargain-level mortgage rates.

Of course, there are niches of strength. In Severna Park, for instance, first-time homebuyers have had to compete to purchase certainsingle-family homes at the low-end of the price range, reported Patricia Savani of Champion Realty.

Local real estate analysts say it is natural that first-time buyers would have the most momentum in the current real estate market. That's because most first-timers, who are typically renters, have the advantage of being able to make a housing purchase without first selling a home.

July's hot weather and the typically sluggish August selling season have not made real estate specialists optimistic. Still, local real estate executives are at least pleased that the worst of the recession appears over.

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