Browsers flock to open houses

March 20, 1994|By Ellen James Martin | Ellen James Martin,Sun Staff Writer

Each Sunday, Chris Bryant and his fiancee spread out the newspaper. Then they draw up an intricate itinerary that allows them to cram as many open house visits as possible into one afternoon.

Their quest? To find the right house quickly.

"We're trying to get something locked in before mortgage rates get too high," said Mr. Bryant, engineering manager for WBAL Radio and TV.

Since they hit a 20-year bottom last November, mortgage rates on home loans have climbed a full percentage point to about 7.5 percent for 30-year loans.

Rates are still low enough for most prospective buyers to qualify for the home they want. Still, the rise has created urgency for many buyers like Mr. Bryant and his fiancee, Libby Campagna.

"We think even higher rates are coming back. So now is the time to buy," said Ms. Campagna, who works as a purchasing agent for a nonprofit association in Baltimore.

Higher interest rates, combined with a break in the unusually harsh winter weather, have led to an unusual outpouring of interest in open houses in the Baltimore area, local real estate executives say.

"The spring market that we've all been dreaming about is actually here," said Chris Coile, president of Champion Realty, a local chain based in Severna Park, which sponsored 90 open houses last Sunday.

So far in March, traffic at local open houses has been running at double what it did during the same month last year, realty firms report. They're also witnessing double the open house traffic that they did last month -- when snow, ice and low temperatures kept many prospective buyers off the house-hunting trail.

"Buyers have come out of the woods. Because of the change in the weather and the change in interest rates, the feeling is that now is the time to take action," said Arthur Davis III, president of the Maryland Association of Realtors.

But real estate specialists say that their optimism about a strong spring market must be tempered with the recognition that the market remains volatile and that buyer confidence could drop as suddenly as it has risen. "Real estate is kind of a funny business. It goes in spurts," said Joseph Saynuk, an agent for the Phoenix office of Coldwell Banker Grempler Realty Inc.

He worries that some bad economic news, or reports of large-scale layoffs, could cause buyers to retreat once again, as they did during much of the recession that began in 1990.

Mr. Saynuk, the agent working with Mr. Bryant and his fiancee, worries that many in the crowd of lookers won't turn into buyers after all.

"People are still losing their jobs. They're reluctant to put the cash down and make a purchase," Mr. Saynuk said.

But at the Towson headquarters of Coldwell Banker Grempler Realty Inc., company president D. R. Grempler is one believer that many of those prospective buyers coming out are very serious.

"We haven't seen a deluge of sales yet. But there's been an awful lot of buyers out and around looking. Lots of buyers are making appointments with agents to see listings. And our conference rooms have been crowded with people getting qualified to buy," Mr. Grempler said.

Despite their urgency, most buyers are still very picky and insist on seeing at least 20 houses before they make their final selection, Mr. Grempler said.

"They want to be sure not to pay too much for a house," he said, noting that memories of the falling prices that occurred in many neighborhoods during the recession are fresh in the minds of many buyers.

As evidence of his conviction that more home sales are starting to materialize in March, Mr. Grempler said he's noticed a recent rise in the volume of escrow funds his company's offices collect. Escrow funds come mainly from the earnest money checks buyers submit along with their contract offers.

Escrow fund collections are running at least 20 percent ahead of last year for the same offices, he said.

Mr. Coile also has evidence of the serious intentions of many buyers -- having last Sunday sold one of his own rental properties, a split foyer in the Cape St. Claire section of Anne Arundel County, for the full asking price of $126,900. The house sold in just one day.

The Champion president said he is convinced there is serious pent-up demand for purchases. And he thinks the strongest segment of buyers is represented in those seeking to trade up to their second homes. Many have young families and have outgrown the houses they bought shortly before the recession began in 1990.

"The hottest market now is the first move-up market, in the $150,000 to $200,000 range," Mr. Coile said. On the other hand, "the weakest of the price segments is above $400,000. Everybody has to sell from below to work up to that market," he said.

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