Carroll housing market is growing, but slowly '93 permits issued near '88 level

November 07, 1993|By Kerry O'Rourke | Kerry O'Rourke,Staff Writer

Builders are hanging drywall and real estate agents are advertising open houses throughout Carroll as the county's housing market begins to improve.

"The market is improving ever so slightly," said Jeffrey B. Powers, president of the Carroll chapter of the Home Builders Association of Maryland.

"The housing market does appear to be gaining some strength," said M. Lynn Rill, vice president for residential real estate loans at Carroll County Bank and Trust Co.

County statistics show that the number of residential building permit applications this year is higher than it has been for four years. The numbers show a steady increase this year from January to June, a decline in the summer and a second increase beginning in August that was continuing through the end of last month.

Officials estimate there will be 1,468 residential permit applications this year, Department of General Services Director J. Michael Evans said last week.

The last time Carroll saw more than that number of applications was in 1988, when there were 1,584 applications.

In 1992, there were 1,135 residential building permit applications; in 1991, there were 753.

The permits are for homes that probably won't be occupied until next year, Mr. Evans said, because it usually takes six months to a year to build a home and for the owner to move in.

Carroll is expected to gain 1,056 homes that will be ready for occupancy this year, statistics show.

The last time the county gained more than that was in 1989, the numbers show.

Last year, Carroll gained 984 homes; the year before, the number was 816.

"It's a healthier market than we've had for quite some time," Mr. Evans said. He called this year's increase a building "boomlet."

The new homes mean an increase of about $3 million in county coffers from impact fees, he said.

Impact fees are levied on new residential development to pay for expanding schools, parks and other facilities to accommodate growth. The fee for single-family homes in South Carroll is $3,500; elsewhere in the county, the fee is $2,700.

Sales may be increasing because buyers may be convinced that interest rates are climbing, said Mr. Powers, of Powers Construction Co. in Westminster.

The rate for a 30-year fixed mortgage at Carroll County Bank and Trust on Friday was 6.875 percent with 3 3/4 points, Mr. Rill said. Union National Bank's rate was the same, but with 3 points.

Interest rates began to rise last week. One to two months ago, the rate was 6.5 percent, Mr. Rill said. He expects rates to increase to 8 percent by the end of 1994.

"Still, the rates are reasonable in the scheme of things," he said.

In the late 1980s, rates were nearly 10 percent, Mr. Rill said.

Interest rates tend to rise when the economy improves. When the economy is slow, the government tries to stimulate growth by making it cheaper to borrow money, he said. When the economy is doing well and there's more demand for loans, interest rates increase.

"It almost seems the economy is ready to go, but nobody is ready to admit it yet. I think there's a lot of pent-up demand for housing in Carroll County," Mr. Rill said.

While builders are working, real estate agents are selling more new and existing homes than they did last year, according to numbers from the Carroll County Association of Realtors.

Statistics show that 180 homes were sold in October in Carroll. That was a 19 percent increase over October 1992, when 151 homes were sold.

The number of homes with sales contracts pending increased 46 percent from October 1992 to October 1993.

Last year, there were 113 homes with pending contracts. This year, the number was 165.

New listings in Carroll decreased 6 percent. In October 1992, there were 296 homes listed with agents; this October, the number was 277.

The average price of a home in Carroll increased 1 percent, from $143,538 in October 1992 to $145,666 last month.

Carolyn R. Burdette, who works for Long & Foster Realtors in Eldersburg and is president of the Carroll County Association of Realtors, said business began increasing at the end of September.

"It's not enough to make us march up Main Street, but it certainly is better than it has been," she said. "People have waited so long [to buy homes]. The market has been off for almost four years."

"Less expensive homes [in the $100,000 to $125,000 range] are moving very, very quickly" in Carroll, said Denise A. Hayes, the association's past president.

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