Single-family home buyers boost market 7.7% rise in purchase of new condominiums also aids 3rd quarter

BTC Townhouses struggling

But even with gains, sales over 9 months are down from 1996

November 30, 1997|By Robert Nusgart | Robert Nusgart,SUN STAFF

An increase in single-family home sales -- with an assist from condominiums -- has helped ease the sagging Baltimore metropolitan new-homes market, according to third-quarter statistics released by Housing Data Reports.

According to the Washington-based firm, which tracks and analyzes new-home sales, there was a 4.6 percent rise in sales during July, August and September and a 7.7 percent gain in condominium sales over the same period in 1996.

Yet even with these gains, HDR said year-to-date overall sales for single-family detached homes, townhouses and condominiums remained 7.2 percent off the pace, with 5,953 units sold compared with 6,421 in 1996.

"The quarter's upward gain was indicative of the overall region as a whole," said Ken Sugarman, executive vice president of HDR.

One area that continued to struggle was the townhouse market, where every jurisdiction saw declines. According to HDR, townhouse sales were off 12.4 percent through the third quarter when compared to last year's year-to-date totals.

Sugarman said there may be a connection between those figures and the rise in detached-home sales. He said that with mortgage rates hovering in the low 7 percent range, many young families, who would normally be looking to move into a townhouse, are stretching their dollars and making the leap into the single-family home.

In its analysis, HDR also suggested that slow job growth and a sluggish economy in the Baltimore area may be forcing young families -- usually the townhouse buyer -- to move to markets outside the region.

"In general, what builders are frustrated about is that the national news keeps talking about how great everything is," Sugarman said. "And, unfortunately, in this East Coast, lower mid-Atlantic region, the sales and economy overall aren't as strong or as hot as in the rest of the nation."

Nevertheless, with the slight rebound in single-family and condominium sales, Sugarman said, there is optimism that the year will end stronger.

"It's not that it's bad," he said. "In general, [builders] are pleased overall with where the market has gone this year. It started out very slow and has -- since the second half of the year -- really started to pick up; they are optimistic. The buyers are out there. Traffic levels are extremely high. It's just taking people longer to make that decision."

Sugarman added that, according to HDR's analysis, turning a visitor into a buyer is taking longer. "A buy decision that used to be made after the third or fourth visit now takes as many as six to eight visits," he said in HDR's report.

In fact, turning a prospect into a sale can take up to six months in many areas. And that is indicative of the continuing buyer's market, Sugarman said.

"The shopping is slower than ever because there is so much more to look at, so much more to assess," he said. "There's definitely no lack of product out there."

Sugarman said the Owings Mills/Pikesville area continued to be one of the area's strongest markets. Thomas Builders' Persimmon Park at Owings Mills New Town is the region's top-selling townhouse community.

Meanwhile, Hollington, built by Trafalgar House, has had 50 sales through September, making it the second-best-selling condominium community in the region behind Sturbridge's Tidewater Colony in Annapolis.

The two top-selling single-family communities, according to HDR, are White Marsh Farms by Appletree Homes and Ryland's Pointer's Run in Columbia.

Overall, Ryan Homes Inc. remained the area's largest home builder, capturing 14.2 percent of the market with 58 projects. That represented an increase from the end of 1996, when Ryan held 12.5 percent of the Baltimore market with 57 projects.

Following Ryan was Ryland Homes Inc., which also showed an increase over the end of last year. Ryland's share moved to 7.1 percent on 27 projects vs. 6.1 percent on 28 projects at the end of 1996.

Pub Date: 11/30/97

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