Robust sales, higher prices

Existing homes sell briskly in '99

rates rise

new homes dip


February 18, 2000|By Robert Nusgart | Robert Nusgart,SUN STAFF

The final housing numbers for 1999 show what most industry observers knew all along: Sales of existing homes were up. New home sales were down. Home prices continued to climb, and inventories continued to shrink.

And despite 30-year, fixed-rate mortgages that rose from 6.73 percent in January to 7.86 in December, the conclusion about the Baltimore housing market in 1999 was that it was one of the most robust in years.

Existing home sales for 1999 finished up 7.14 percent over 1998, with 30,856 units settled -- the highest of the decade -- according to statistics released yesterday by the Metropolitan Regional Information System, the multiple-listing database used by the housing industry.

However, 1999 new home sales in the Baltimore metropolitan area came to 8,572 units sold, representing a 10.3 percent decline vs. 1998, when 9,551 homes were bought. Nevertheless, 1999's totals were the second-highest in past five years, according to The Meyers Group, a Washington firm that tracks and analyzes new home sales.

"Certainly the type of demand that we have had in the last two years would just be impossible to sustain for a long period of time," said Patrick J. Kane, president of the Greater Baltimore Board of Realtors and vice president of Coldwell Banker Grempler Realty Inc. "We would be approaching a crisis situation if the listings were creeping up and the sales were creeping down. And that is not what is happening."

What did happen was higher prices for both new and existing homes.

The average sales price for an existing home in the Baltimore area rose to $153,987, a 3.38 percent increase. For a single-family detached home, the average sales price was $203,272, a 6.15 percent rise. For townhouses, it grew to $103,920, a 5.44 percent increase.

The average sales price for a new home jumped 6.5 percent to $189,063 in 1999. Likewise, the average price for a new single-family detached home increased 4.9 percent to $246,007 -- the highest average price in the past five years. In 1995, the average price was $208,178.

New townhouses were slightly more expensive, costing an average of $130,265, a 0.7 percent rise. Condominiums rose to $117,931, a 1.6 percent increase over 1998.

While sales of new single-family homes dipped 1.4 percent, the biggest declines came in the new townhouse and condominium sectors, which were off 17.6 and 19.9 percent respectively.

Earl Robinson, sales and marketing director for Ryland Homes, blamed the drop in new home sales on a shrinking base of communities, attributed to Smart Growth policies.

"We don't have enough communities going through the approval process, which is causing the number of sales per community to go up, yet the overall number of sales go down," Robinson said. "The market is good. We're happy. We just wish we had more communities."

Robinson said Ryland -- the area's No. 2 builder behind Ryan Homes Inc. -- had 528 sales in 15 communities in 1998. Last year it had one more sale in three fewer developments.

Robinson said in prior years Ryland wouldn't build a house without having a buyer for it. "Today, we have a hard time keeping inventory," Robinson said, pointing to Winterset, an Owings Mills community of single-family homes.

"We purposely started eight houses [without buyers in Winterset], and we sold the last one [Wednesday] -- they are sold before we have the next group permitted," he said. "We have done really well with inventory, but part of that is because there is not much choice on the market. The other part is that the market is still strong."

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