Spring is looking rosier for home sellers and buyers The MARKET HEATS UP

March 27, 1994|By Ellen James Martin | Ellen James Martin,Sun Staff Writer

These days, Neil Tranter is so busy that his phone messages stack up and his appointment book is jammed with the names of homeowners who want to sell, as well as prospective buyers who want to see property.

"The market is really crazy right now. People are finally loosening up and putting their homes on the market," said Mr. Tranter, an agent with RE/MAX Realty in Columbia.

Like other real estate professionals in the Baltimore area, Mr. Tranter says this spring's selling season is the strongest one they've seen in at least three years, especially because trade-up buyers are bringing their homes to market.

"The spring market is looking very good," said Mary A. Fruscello, executive vice president of the Maryland Association of Realtors.

Early 1994 numbers already look positive. Sales of existing homes in the Baltimore area shot up 14 percent in February compared with February 1993, the Greater Baltimore Board of Realtors reported. At the same time, pending home sales -- those under contract but yet to go to settlement -- increased 2 percent for the month.

New-home sales hit a 10-year high in 1993 and are expected to climb in 1994, according to Legg Mason Realty Group Inc.

Despite this optimism, many agents admit that they're a little worried that first-time buyers will hesitate to jump into the market -- and that not all of the hectic activity will lead to sales.

"Buyers are swinging back and forth a lot. Instead of deciding among the 10 houses they've seen, they want to look at 10 more. Everything has got to be perfect before they make a decision," Mr. Tranter said.

Ever since mortgage rates began heading up, would-be buyers have been calling real estate agents, crowding into open houses and anxiously conferring with lenders.

Last week the rate on a 30-year fixed mortgage in Baltimore averaged 7.83 percent, up from a 1994 low of about 7 percent last month, according to Keith Gumbinger of HSH Associates of Butler, N.J. Rates had fallen to a 28-year low in August, when they hovered about 6.75 percent.

But many first-time buyers remain uncertain about their jobs, the PTC economy and home prices. Driven by fears of still higher rates, some have committed to a purchase. But others are indecisive.

"There's a lot of pent-up demand and optimism in the market now. But no one has a crystal ball to tell what it will all mean," said Michael Drummond, a loan officer with Maryland Home Mortgage Corp., based in Lutherville.

"The market is positive. But there's still a lot of wishy-washiness," said David McIlvaine, an agent with ERA Caton Realty Co. in Catonsville.

As an example, Mr. McIlvaine told of a Catonsville couple in their mid-30s who have rented for several years. After touring several dozen houses, they sat down with Mr. McIlvaine to write a contract on one of two four-bedroom Colonial homes they'd found in Catonsville. Unable to reach a decision, however, they backed off completely.

"They went into neutral gear. My guess is that they just became frightened," Mr. McIlvaine said.

"On the one hand, they realize that continually renting is costing them money on their taxes," Mr. McIlvaine said. "On the other hand, they're slow to make a move."

Much less ambivalent about making a move this spring are trade-up buyers who are more confident about the future value of their homes because they've already bought a home once.

"We're seeing the higher-priced houses sell to the more sophisticated buyers," said Marc Goldstein, an agent with Long & Foster Real Estate Inc. in Pikesville.

Even more than first-time buyers -- many of whom are under 30 -- those seeking to buy their second or third homes are fearful that mortgage rates will rise still further and put their dream homes out of reach, Mr. Goldstein said.

For those with experience in the home-buying game and the confidence to act, rising mortgage rates have been a powerful prod, says Beverly Rosen, sales manager for Long & Foster's Pikesville office.

"The high end is real strong. People feel they can take that jump now to a more expensive home," said Ms. Rosen, who predicts this spring will be a very good season for move-up buyers in the $300,000 range.

"People who have been fence-sitters, waiting for lower interest rates, now recognize that rates are not going any lower any time soon and they should go out and buy," said Charles "Chic" Reid III, branch manager for the Lutherville office of Maryland National Mortgage Corp.

Consumer confidence should continue to firm up, bringing more first-time buyers to the point of decision-making, said Mr. Reid, .. who is also president of the Maryland Mortgage Bankers Association.

First-time buyers are an essential element in the marketplace, he said, because it's necessary for them to purchase the lower-end properties before those owners can move up.

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