Metropolitan area new-home sales decline 1.6 percent

REAL ESTATE WATCH

February 09, 1997

New-home sales may have jumped to their highest level nationally in two decades, but for the Baltimore metropolitan area, sales were down slightly at 1.6 percent.

For 1996, 8,084 units were built as opposed to 8,223 in 1995, according to Housing Data Research, which tracks and analyzes new housing construction.

Only Carroll and Howard counties showed overall increases, with gains of 14.6 percent for Howard and 9.1 percent for Carroll.

Baltimore County new-home sales dropped 4.8 percent, with the greatest part of the decline coming in the condominium market. Those fell by 128 units.

In fact, neither the city nor any of the counties showed an increase in that category.

The move to Carroll County continued to be strong in the single-family homes market, with a 26.6 percent increase in sales.

The general drop in new-home sales, according to one economist, is due to the high inventories of resale homes on the market.

"We have a situation where inventories are high, prices are low and it becomes an unattractive market for builders to build new homes," said Mike Funk, research economist for the Regional Economic Studies Program at the University of Baltimore.

Funk, however, expects a turnaround because overall sales are picking up, thus reducing the inventories.

"The numbers just aren't as bad as they seem," Funk said.

"When the builders get a more favorable market, that's when you'll see more building activity."

Pub Date: 2/09/97

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