Market bodes well for sellers in '94

December 12, 1993|By Ellen James Martin | Ellen James Martin,Staff Writer

It's still a buyers' market in most parts of the Baltimore area, but those who track real estate say there's good news on the horizon for those planning to sell.

"Your day is coming, sellers. I would begin preparing the house for sale," said Michael Conte, director of the University of Baltimore's regional economic studies program. "Next year, you're going to get something close to your asking price."

While "robust" is too strong a word to describe the market, local observers see improvements that, they say, presage a better 1994.

Last week, the Greater Baltimore Board of Realtors reported a 20 percent rise in home sales settled in November, compared to the same month in 1992. Pending sales -- those under contract but yet to go to closing -- increased 11 percent.

Also encouraging was the news that the average price of a home sold in the Baltimore area in November increased 4 percent, to $132,007.

"This is a very credible housing recovery," said Mr. Conte. Consumer confidence may suddenly rise and then fall, but home sales are a more accurate reflection of the public's mood.

"I agree with the prognostications of the economists who say that '94 will be better than '93," said James P. O'Conor, chairman of O'Conor, Piper & Flynn, the Timonium-based realty company.

A slight spike in mortgage rates in late November signaled to many wait-and-see homebuyers that it was time to act, said Arthur Davis III, president of the Maryland Association of Realtors.

Rather than crying that they missed the mortgage rate trough -- which occurred this fall and saw rates sink below 7 percent for the first time in 25 years -- buyers are moving back into the market, though not yet to the point of pushing up prices, Mr. Davis said.

Despite a pickup in demand, selling prices for homes in the Baltimore market are now generally as low as they have been at any other time this year, Mr. Davis said.

"What's happening is that asking prices have come down closer to selling prices," he said.

To this point, fears that home values could slip had made some prospective homebuyers reticent. But local analysts contend that the market should, at the minimum, sustain current home values in the next several years.

Mr. Conte predicted that home prices in Baltimore in 1994 "will probably keep up with inflation and no better." Homes in suburban areas that border the Washington market -- including Howard and Anne Arundel counties -- will appreciate the most, Mr. Conte predicted.

Sales of higher-priced homes -- $200,000 to $300,000 -- are expected to improve.

"We're starting to get more jobs at the managerial level which should finally give us some pickup in the middle- to upper-price ranges of the housing market," Mr. Conte said.

But not every real estate specialist thinks 1994 will be great.

Rick DelSantro, director of marketing for the mid-Atlantic division of Century 21, the franchise realty chain, is worried the burst in home sales won't last.

The enthusiasm of would-be buyers may be tempered after the first quarter of the year because of higher federal tax rates, changes in the nation's health care system and the continued "downsizing" of U.S. corporations, Mr. DelSantro believes.

In November, sales in Harford County were 244, up 50 percent from the same month last year; Baltimore County, 638, up 23 percent; Howard County, 285, up 20 percent; Carroll County, 161, up 18 percent; Baltimore City, 358, up 14 percent.

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