1995 home sales off 6% prices were almost flat

Activity picked up toward end of year

January 06, 1996|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Paul Diegelman expected a long parade of lookers traipsing through before anybody would actually buy. So he and his wife put their golf course townhouse in Columbia on the market well before they planned to move -- a year before, to be precise.

Plenty of homeowners looking to sell would understand.

Picky buyers, a soft market, sellers lowering prices to match owners up the street -- it had been that kind of year in Baltimore area real estate.

Yesterday, year-end figures from the Greater Baltimore Board of Realtors bore this out. Sales fell 6 percent in 1995. Prices barely budged from the 1994 average, leveling off at $132,745. And nearly three times as many homes went on the market as actually sold.

"To sell real estate took a tremendous amount more time and effort," said Doug Poole, a real estate agent with O'Conor, Piper & Flynn Realtors in Hunt Valley. "It took a lot more hand-holding, a lot more trying to smooth the rough edges because buyers were so demanding, and sellers were not used to buyers being so demanding."

Few homes sold for the asking price; buyers even haggled over new home prices, he said. Sellers got used to waiting six to eight months -- instead of six to eight weeks -- to clinch a deal.

"Number one, there was no such thing as offering the asking price," Mr. Poole said, recalling how it once was considered insulting for buyers to ask for a reduction of more than 10 percent of the seller's price. No longer, he said.

Mr. Diegelman, who put his townhouse up for sale in late August, plans to relocate next summer. He has shown the house, dropped his price twice and switched real estate agents.

"I had an awful lot of buyers coming through who are just very selective," said Mr. Diegelman, a financial analyst for Baltimore Gas and Electric Co. "It's truly a buyer's market. They have an opportunity to look at every home on the block."

The board's monthly report showed 16,350 homes were sold in Baltimore and Baltimore, Howard, Harford and Carroll counties, compared with 17,428 in 1994. Sales declined in each county -- by as much as 16 percent in Carroll -- but rose 2 percent in the city, where lenders and city officials have offered incentives to first-time buyers.

Still, the year ended better than many in the industry had expected, largely because of falling interest rates, which have made buying more affordable, attracting first-time buyers.

Rates on 30-year, fixed mortgages averaged 7.29 percent Thursday in the Baltimore region, according to HSH Associates of Butler, N.J. Nationally, rates fell to their lowest level in nearly two years, averaging 7.02 percent, Freddie Mac reported. The Baltimore region started 1995 with rates at 9.4 percent.

"There was concern that interest rates may be increased rather than decreased," said Adam D. Cockey Jr., president of the Board of Realtors. "This winds up much better than we thought it would. The first quarter of '95 was a very sluggish quarter. We had to really catch up and build momentum to get the end result."

Buying and selling picked up during the last few months of the year, with first-time buyers largely driving increases, agents and lenders said. Sales shot up 11 percent, to 1,290, for the region in December, the board said yesterday.

"People at the end of the year felt comfortable and were looking for bargains," said M. Wingate Pritchett, senior mortgage specialist with First Town Mortgage Corp. in Lutherville. "They felt some of the real estate had been on the market for a while, and they could get a deal."

Analysts expect the momentum to carry over this year.

"We're starting off with a very low interest rate environment," said Michael Funk, assistant director of the University of Baltimore's Regional Economic Studies Program, "and some of the weakness in the early part of '95 is behind us now."

Mr. Diegelman is banking on such predictions in selling his townhouse. "The lower the rates go, the bigger the pool of people who can buy my house," he said.

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