Scarcity of loans could mean shortage of homebuilding lots

October 07, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

Maryland's growing counties will face an acute shortage of homebuilding lots beginning next summer because of the lack of loans for land development, real estate analysts predicted yesterday.

At the same time, lagging consumer confidence in the economy and fear of job losses will keep home sales in the Baltimore area static through 1994, the Greater Baltimore Board of Realtors was told at its annual convention.

"The resale markets are still a little weak, especially at the upper [price] end," said Robert Kleinpaste, president of the Legg Mason Realty Group.

The expected shortage of new home lots will become especially apparent in Maryland counties where increases in population should intensify demand for new homes in the next several years, said Glenn R. Mueller, director of research at Alex. Brown Kleinwort Benson in Baltimore.

Those counties include Howard,Anne Arundel and Montgomery, he said.

"Developed, finished lots will be basically impossible to find next summer," said Mr. Mueller.

The firm projects population increases through 1995 of 11.5 percent in Howard County, 5.9 percent in Anne Arundel and 5.5 in Montgomery County.

But new-home buyers will find fewer properties from which to choose and higher costs for those homes that are available, said Mr. Kleinpaste, who tracks the homebuilding industry in the Baltimore-Washington area.

The shortage of new-home lots results from the continuing lack of capital for residential land development, Mr. Kleinpaste said.

"The number of subdivisions is dropping dramatically," Mr. Kleinpaste said.

Because of of the loans to real estate developers that turned sour since the late 1980s, most banks remain reluctant to lend to developers, Mr. Kleinpaste said.

Another factor, Mr. Mueller said, is that it is taking longer for developers to gain permits they need from local governments.

"The development pipeline is drying up," he said.

In terms of the overall home sale market for the Baltimore area, Mr. Kleinpaste predicted little change in the near future, as the modest economic recovery continues.

The market for homes valued at more than $250,000, which was the most shaken during the recession, is just now starting to stabilize, he said. Legg Mason does not make numerical forecasts on the resale market.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.