State lags in home resales

May 05, 1994|By Lorraine Mirabella | Lorraine Mirabella,Sun Staff Writer

Sales of existing homes in Maryland increased by the smallest amount of any state during the first three months of this year as severe weather kept many prospective buyers off the roads and out of open houses.

But local Realtors say that the warmer weather had brought a spurt of new interest in April from shoppers, worried that interest rates were headed higher.

While low interest rates helped boost sales by as much as 39.8 percent in Arizona, which recorded the largest increase during the quarter, Maryland's home sales figures rose only 1.9 percent compared with a year ago, according to the National Association of Realtors' (NAR) latest survey of previously owned homes.

"I don't think this is any indication of extreme weakness in Maryland's home sales market," said Michael A. Funk, assistant director of the Regional Studies Program at the University of Baltimore. "We had horrible weather in the first quarter. People don't get out and buy with sleet or ice."

For the nation as a whole, the Realtors said sales of existing homes rose 14.2 percent to a seasonally adjusted annual rate of 4.49 million.

Maryland's increase lagged behind 43 states and the District of Columbia. Four states suffered declines, while data from three states was unavailable.

"Maryland got hit with the ice worse than anyone else," said Arthur Davis III, president of the Maryland Association of Realtors. "The impact on us was greater than in other areas that just got snow."

The more rural counties in Maryland, including Allegany, Garrett and Frederick and some counties on the Eastern Shore, suffered the greatest slowdown in home sales because of weather, he said.

In a separate report issued yesterday, the Greater Baltimore Board of Realtors said that average home prices in the Baltimore region increased 6 percent to $128,727 in April compared with a year ago. Nationally, the median price of a previously owned home rose 3.5 percent to $107,400 over the past year.

Mr. Funk predicted improved sales in the second quarter, even if interest rates continue to climb toward 9 percent. Fixed-rate, 30-year mortgages averaged 7.30 percent in the first quarter, but have risen to 8.32 percent, according to the Federal Home Loan Mortgage Corp.

Buyers kept indoors by bad weather and those who've waited for interest rates to hit bottom finally will enter the market, Mr. Funk said.

Statewide, sales across all price ranges appear to have begun recovering in March and April, Mr. Davis said. Agents are reporting brisk sales in higher priced housing generally as well as in areas including Montgomery and Frederick counties, he said.

At Long & Foster Real Estate Inc., the number of pending sales began rising in the Baltimore region in March, though they slowed in parts of Southern Maryland, said Wesley Foster, chairman.

Though sales rose only 1.9 percent across the state during the first quarter, the number of home sales that reached settlement increased 10 percent in the Baltimore region, which includes Baltimore City and Baltimore, Carroll, Harford and Howard counties. "The [statewide] numbers really surprise me," said James P. O'Conor, chairman of the board of O'Conor, Piper & Flynn, who said pending sales for his agency jumped dramatically in the final three months of last year.

Sales figures released yesterday by the Greater Baltimore Board of Realtors showed the market continuing to improve in April. The board reported 1,508 settled sales, a 17 percent increase over last April.

But the number of sales still under contract dropped in April to 1,689, down a full percentage point compared with April 1993, the board said.

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