Home sales declined 13% in May

June 07, 1995|By Lorraine Mirabella | Lorraine Mirabella,Sun Staff Writer

Continuing a slide of nearly a year, Baltimore-area home sales fell 13 percent in May, the Greater Baltimore Board of Realtors said yesterday.

But the drop was the least severe of the monthly decreases since November, and there were indications that sales would pick up during the second half of the year.

Sales of new and existing homes in Baltimore and Baltimore, Carroll, Harford and Howard counties fell to 1,489, down from 1,709 in May 1994, the board said. Decreases ranged from 15 percent to 29 percent in the counties, with sales up only in the city -- by 10 percent.

Although sales declined, the average regional figure represented an improvement over the past six months, when sales had been off by as much as 34 percent.

"That decrease is shrinking, and it's shrinking because of more sales we're making because interest rates have been more appealing," said Adam D. Cockey Jr., president-elect of the Realtors board.

Since January, interest rates have fallen about one-quarter percentage point each month, with rates on 30-year, fixed mortgages averaging 7.79 percent in Baltimore last week.

"There's no question that interest rates certainly do motivate buying," Mr. Cockey said.

Lower interest rates this spring also prompted more buyers to sign sales contracts. Contract signings rose 6 percent in the Baltimore region in May, an indication that final sales also will improve in the coming months, the board said yesterday.

Although statistics have painted a bleak picture of home sales all year, the housing market might be in better shape than it appears, said Michael Funk, assistant director of the University of Baltimore's Regional Economic Studies Program.

"Last year we had a robust market in the first quarter -- part of it brought on by interest rate increases," Mr. Funk said. "Everyone knew that was the end of rates as low as they were, and a lot of [buyers] on the fence came off the fence. It's unfair to compare this year's numbers to the first half of last year's when we had an extraordinary set of circumstances."

With interest rates expected to remain stable or drop further, sales during the second half of this year should surpass sales for the second half of last year, he said.

The board reported that the average price of a home fell 5 percent, to $126,075 in May.

"Sellers are listening more carefully to the price they're being giv

en on value by a Realtor, and they're more willing to accept that advice today than they were a couple of years ago -- or even a year ago," Mr. Cockey said.

Part of that stems from the abundance of homes currently listed for sale -- which means that home buyers tend to look at more properties, said Pat Hiban, an associate broker with Re/Max Advantage Realty in Columbia.

"You have to price yourself below the competition if you look the same as the competition, or the same as the competition if you're better," he said. "Otherwise, it won't sell."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.