A little more than six months ago, incoming president of the Greater Baltimore Board of Realtors Gilbert D. Marsiglia was cautiously optimistic that 1998 would be a "decent year."
Decent isn't the word that area Realtors and industry officials are using to describe the first half of 1998.
Try "unparalleled" ... "wonderful" ... "unprecedented."
After a flat 1997, when sales for existing homes showed a 1 percent increase for the year, the electricity began to flow into the Baltimore real estate market in January and hasn't stopped. According to statistics from the Metropolitan Regional Information System and the Anne Arundel Multiple List, sales of existing homes are up 24 percent for the first half of 1998 when compared with the same time in 1997. And brokers and agents are saying that this might be the best six-month run in Baltimore real estate history.
"I think the last six months have been unprecedented," said James P. O'Conor, president and chief executive officer of O'Conor, Piper & Flynn-ERA, who first started selling real estate in 1953. "It probably has been the greatest real estate activity in the Baltimore market in its lifetime. That's a pretty dramatic statement. I've never seen one better than this."
The rise in the Baltimore market mirrors the activity throughout the country.
In its July economic forecast, the National Association of Realtors projected that 4.54 million units will be sold this year, a 7.7 percent gain over last year's record total of 4.21 million units.
Although O'Conor would not release specific company numbers, did say that June provided OPF-ERA, the largest firm in the Baltimore metropolitan area, with its 14th consecutive month of higher sales when compared with the corresponding month from the previous year.
"When you look at percentages that are 30 and 40 percent better than the same month in the preceding year, the percentages for all the months are double digit, and I don't mean just 10 or 11, I'm talking about the high 20s or the 30s or 40 percent," he said.
'More than decent'
And with hindsight, Marsiglia, who has had his own firm since 1972, now describes the market as "more than decent."
Marsiglia said his company's sales figures are up 25 percent over the first six months of 1997.
Likewise, Long & Foster Real Estate Inc. is heading toward another record year for the company. Through the first half of 1998, its Baltimore region is 27 percent higher than last year, and the company is up 29 percent overall. And for the first time in its history, Long & Foster reported sales exceeding $1 billion in total dollar volume for each of the last four months.
"It's wonderful," said P. Wesley Foster Jr., for 30 years the president of Long & Foster. "It's the best we have seen in 10 years quite honestly this is about the best we have ever seen."
The strength of the market didn't capture Foster's attention until late winter.
"We had a good January and February, but March was the boomer, and I don't think it got through to us until about then," Foster said.
To most industry observers the fuel for the surge in sales can be traced to a number of factors working in concert. Among them are:
* High consumer confidence;
* Steady and lower mortgage rates;
* A warm winter, prompting an early spring market;
* Large inventory of homes;
* Economic growth;
* Low inflation;
* Low unemployment;
* Advantageous changes in capital-gains taxes;
* Influx of first-time homebuyers, igniting the move-up market.
But of all the factors, perhaps the most influential has been the giddy confidence expressed by consumers, according to one economist.
"No matter what the interest rates are, it's not going to ignite a very strong market if consumers don't feel good about their own economic condition and their own individual prospects," said Michael Funk, research economist at the Regional Economic Studies Institute at Towson University.
"I think you can see an example of that in 1993, because interest rates were this low [7 percent] in 1993. They weren't there for as long as they have been now, but at that time Maryland was still showing very lethargic [economic] growth. The outlook was very uncertain.
"Right now we have the best of everything. We have low inflation. We have a growing economy that's growing at a very strong but controlled way, and interest rates that for the entire year have hovered around 7 percent.
"There is no aspect of this economy that you could say 'if this was a little better or if interest rates were a little lower or if the outlook of the economy was a little better' it's all there."
Patrick J. Kane, vice president of Coldwell Banker Grempler Realty Inc., who blamed the lackluster market in the last several years on the Maryland economy, agreed.
"In the last year, in general, we've had some really good economic news in Maryland," he said.
And Marc Witman, a Realtor with Long & Foster and president-elect of the GBBR, also noted the effect that the ever-rising stock market has had on the housing market.