Housing sales sizzles at high end of market

Boom: A strong economy and low interest rates are driving up the price of prime homes -- and driving buyers to distraction.

May 09, 1999|By Kristine Henry | Kristine Henry,SUN STAFF

Buyers looking for expensive homes in the Baltimore metropolitan area need to remember one rule: Bring your checkbook, and if it looks good, buy it.

Don't mull it over during dinner. Don't even walk outside to gather your thoughts. Just sign on the dotted line, and for good measure be prepared to offer more than the asking price.

As low mortgage rates and a healthy economy keep the housing market hot, the inventory of upper-end homes -- which brokers commonly define as those starting at $300,000 to $400,000 -- in Maryland and the nation is shrinking while prices are increasing.

Competition for these homes is fierce, and buyers who hesitate can be left out of the game.

Nancy Fullmer can attest to Baltimore's cutthroat market. She and her husband, John, have been looking for a house in the Roland Park, Mount Washington and Cedarcroft areas since June.

She worked with an agent until December but always got to homes too late.

"We've been second place time after time after time," Fullmer said. "It's emotionally frustrating. We'll find a place we love, and come to find out someone has already bid $5 [thousand] to $10,000 more than the asking price. It's more than I can bear."

They are moving from Annapolis because their children attend the Waldorf School in the Coldspring area. Fullmer recently retained another agent and hopes her odds of finding a home in the $200,000-to-$300,000 range will improve. If things don't work out soon, she might hang up her buyer's hat.

"With the market like it is, we're thinking it may be nuts to buy anything now," she said. "We should probably rent and hang out and see what happens."

A challenging market

Karen Bisbee, an associate broker at O'Conor, Piper & Flynn ERA in Greenspring, said buyers everywhere in the region are in a "difficult psychological place."

"[Buyers are] coming in pre-approved, so they are not having to complicate offers by making the sale contingent on securing a mortgage," she said. "Many of these buyers have bid aggressively, and over the asking price, on one or more houses, and they walk away shaking their heads because despite their most aggressive position, they still don't walk away victorious."

Competition for high-end homes is especially stiff, but more moderately priced properties in popular Baltimore neighborhoods such as Guilford, Homeland, Canton, Federal Hill and Fells Point are more in demand than they've been in a decade, said Marc Witman, president of the Greater Baltimore Board of Realtors.

"The city market has been the weakest of the regional markets, and we're seeing a definite reversal of trend there," said Witman, who is also an associate broker at Long & Foster Real Estate Inc. in Greenspring. "There's no question this is the hottest market we've had in over 10 years."

It's not just in the city. Joan Tully, an agent with Re/Max Columbia, said that in Howard County sales of homes in the $300,000-to-$500,000 range are stronger than they've been since the early 1980s.

Short inventory

"Homes that would normally come on the market and sit for four to six months are selling in two to three weeks," she said. "In that range there is a shortage of inventory."

In March 1997, 22 homes were for sale in the city in the $400,000-to-$499,000 range, according to Metropolitan Regional Information Systems Inc., which tracks listings and sales by Realtors. This March there were two.

In Baltimore, Howard, Carroll and Harford counties combined, 220 homes were in that price range in March 1997 and 179 this year.

Jake Boone, a real estate agent with Hill & Co., said that if people see a high-end house they like in a popular neighborhood, they should "buy it immediately. Do not go home. Take a contract with you and have it ready to sign immediately. There is no time to waste."

It's a lesson Andy and Karen Segall know well. For the past five months, they've spent nearly every weekend scouring Guilford, Roland Park and Homeland looking for a home.

They make calls immediately upon seeing a yard sign, only to be told the house was sold within hours of the sign going up. They are greeted at open houses with the news that a bid has already been placed.

`Ruthless' bidding

The common practice of making an offer slightly below the list price is becoming pointless as eager buyers are making initial offers well above the asking price.

Brokers say many buyers are even offering bids with stipulations that they will offer, say, $5,000 more than the highest bid up to a certain ceiling. Some don't even name a ceiling.

"It's ruthless," Karen Segall said. "A couple of years ago, you couldn't give houses away in the city, and now there just aren't that many."

Last weekend, the Segalls, both 33, and their 18-month-old son, Ben, toured a six-bedroom, 3 1/2-bath home in Guilford.

They live in a two-bedroom Wyman Park rowhouse and need more space. After considering a move to Baltimore County, they decided they wanted the charm of older homes and the convenience of the city too much to leave.

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