Homebuyers return to the market A dismal first half of 1993 gives way to steady recovery

November 07, 1993|By Lorraine Mirabella | Lorraine Mirabella,Staff Writer

They've slowly crept out after months of hibernation, ready to make that purchase of a lifetime. At long last, real estate experts say, the homebuyers are back.

"It feels so much better," said Cindy Durgin, real estate broker for Century 21 Forty West in Ellicott City, echoing the sentiments of many in an industry emerging from several tough years and a dismal first half of 1993.

Thanks to renewed confidence in the economy and the lowest mortgage rates in a quarter-century, home sales in the Baltimore area rose for the fifth consecutive month.

In October, sales were 1,628, up 5 percent compared with the same month last year, according to the Greater Baltimore Board of Realtors. Homes sold for an average $133,553, up 6 percent from last year.

The figures are for Baltimore and Baltimore, Carroll, Harford and Howard counties.

October figures for Anne Arundel are due out this week from the Anne Arundel County Association of Realtors.

"What we're seeing is a steady cure, because it was such a bad market in 1990," said Nancy C. Hubble, president of the Baltimore board. "What we're seeing is nice steady growth and slowly increasing confidence in the market.

"It's amazing, considering so many jobs have been lost," Mrs. Hubble said. "Apparently, people in Baltimore are not frightened by that and are buying homes."

Real estate agents said they began noticing more first-time homebuyers in the market several months ago, who were able to buy homes and pay less monthly than they had paid in rent.

Those sales gave sellers a chance to move up.

"Now, we're starting to see the upper end moving again," said Patrick Kane, a vice president of Coldwell Banker Grempler Realty. Areas such as Phoenix, Jacksonville and Harford County have proven especially strong, with lower- to mid-range homes still selling better than those priced at more than $300,000, he said.

But though interest rates fell below 7 percent in mid-August -- and only inched back over that mark last week -- such incentives haven't been enough to spur a sales boom the way dipping interest rates did in the 1980s, Mr. Kane said.

"For the last several months, we've been in a very slow, steady climb," he said. "Everything is up, but there hasn't been a real boom."

Still, the market is recovering and doing so impressively, said Michael Funk, assistant director of the Regional Economic Studies Program at the University of Baltimore.

A survey of the state's real estate boards showed sales in July, August and September jumped 22 percent compared to the same quarter last year, Mr. Funk said.

"Interest rates are the major driving force behind it," he said. "And we have some pent-up demand for the higher priced items. Consumers have been thrifty over the past three years, putting off major purchases. Those who were able to hold their jobs through the recession got their personal finances in order and are in a better position to afford these things."

The report of local sales increases in the Baltimore area comes on the heels of a Commerce Department report, released Tuesday, showing the strongest increase in new home sales nationally in seven years. September sales jumped 20.8 percent, to a seasonally adjusted rate of 762,000 units, the government said.

The number of new homes sold this year through September in the Baltimore metropolitan area -- including Baltimore and Baltimore, Anne Arundel, Carroll, Harford and Howard counties -- rose to 8,108, up 2 percent from 7,936 during the same period last year, Legg Mason Realty Group reported.

The new-home market has been especially strong in Carroll County, with building going on in more than a dozen new subdivisions near Eldersburg and Finksburg. Builders have taken offering special deals, such as $5,000 toward closing costs, said Joe DeLuca, broker at Long & Foster in Eldersburg.

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