A luxury more homebuyers could afford

High-priced houses experienced rise in sales last year

`Fiercely strong' market

Biggest transaction was $9.5 million sale in Queen Anne's

February 27, 2000|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

Sarah Sinnickson has seen just about everything in the quarter-century that she's been in the real estate business. Her area of expertise is selling high-priced homes to high-income people.

She oversees NRT Inc.'s International Collection, a division that markets multimillion-dollar properties and estates. NRT also owns O'Conor, Piper & Flynn ERA.

Until a few weeks ago, Sinnickson was the manager of the OPF ERA office on Church Circle in Annapolis, the company's top performing sales office. Now she is president of Pardoe ERA, a Washington-based firm also owned by NRT, where listing million-dollar homes is commonplace.

So it would be hard to believe that anything could faze her. But when the dust settled after 1999's buying frenzy, she pointed to one of the most telling statistics about the luxury market last year: In Anne Arundel County in 1998, there were 10 home sales of at least $1 million. Last year, there were 35.

"It's never happened to me in 25 years in this business, a market like this," Sinnickson said. "I've been in strong markets and I've been in down markets, but I have never seen a market that is so fiercely strong."

The youth of the buyers also was a "startling fact" for her . "That someone in their very early 30s can come in and purchase these very large houses -- cash, that is really an amazing thing," she said.

Buoyed by continued gains in the stock market and economic good times, buyers made last year an amazing time for luxury sales in just about every jurisdiction and at just about every price. In the Baltimore metropolitan region, 347 homes sold for between $500,000 and $749,999 last year, 46 more than 1998 and 139 more than 1997, according to statistics compiled by the Metropolitan Regional Information System, the housing database for agents and brokers.

Other categories were as impressive last year:

87 homes sold for between $750,000 to $999,999, 22 more than 1998 and 49 more than 1997.

47 homes sold for between $1 million and $1.499 million, 33 more than 1998 and 16 more than 1997.

15 homes sold for between $1.5 million and $2 million, nine more than 1998 and 11 more than 1997.

Sinnickson said one reason why the luxury market roared was a realization by homeowners that there was a huge appetite for expensive properties and that it was possible to sell at a price that may not be viable in the near future.

"Agents, with very well-qualified buyers, went literally knocking on doors in areas where the buyer/client had expressed interest to try and shake some inventory loose," she said. "And in many cases, sellers would say, `OK, if you can get me this, I'll sell.' "

Another reason was an influx of Washington big spenders, who found Annapolis real estate affordable compared to Potomac, the District or Northern Virginia.

"They look at what the current inventory pool is in [Washington] and the price ranges and come over [to Annapolis], and it does not seem unreasonable at all to pay these strong prices," said Sinnickson, whose Church Circle office handled the state's biggest transaction last year, a $9.5 million sale in Queen Anne's County.

But that healthy appetite has eaten away at the high-priced inventory for buyers who are hoping to move up this year.

"We have people looking for $1 million to $2 million houses, and we can't find properties for them," said Marc Witman, an associate broker with the Greenspring office of Long & Foster Real Estate Inc. "I don't know if it is just a luxury-market issue. It's the old demand is exceeding supply because the economy is good right now."

Yet as buyers look for upscale homes and their frustration levels rise, Witman said they may have to consider two options: build a house or pay less for an outdated home in a neighborhood they desire and do a major renovation.

"I know there are properties on the market in that price range, but those are properties that for whatever reasons are not suiting the current buyers' needs and that probably means they require a lot of work," Witman said. "People will say, `If I am going to spend that much money on it, I might as well build it myself.'"

And with rising demand, he also predicted that luxury custom-homebuilders will be less cautious about building "spec" homes -- homes constructed before a buyer is secured.

Pat Hagen of Hagen & Hamilton Custom Homes in Timonium disagrees.

"We're not doing any spec buildings. The market is there for it, but we've made a conscious decision for this company against spec building. Right now there's a lot of work, but you do not know how long that will hold out," said Hagen.

Luxury home sales

Sales of luxury homes showed a sharp increase in 1999.

$500,000-$749,000

1998 1999

Anne Arundel Co. 130 143

Baltimore City 15 23

Baltimore Co. 104 106

Carroll Co. 3 6

Harford Co. 3 6

Howard Co. 46 63

Total 301 347

$750,000-$999,999

Anne Arundel Co. 29 41

Baltimore City 3 5

Baltimore Co. 25 31

Carroll Co. 0 2

Harford Co. 1 1

Howard Co. 7 7

Total 65 87

$1,000,000-$1,499,000

Anne Arundel Co. 5 21

Baltimore City 0 2

Baltimore Co. 8 16

Carroll Co. 0 0

Harford Co. 0 0

Howard Co. 1 8

Total 14 47

$1,500,000-$1,999,000

Anne Arundel Co. 3 9

Baltimore City 0 0

Baltimore Co. 2 4

Carroll Co. 0 1

Harford Co. 0 0

Howard Co. 1 0

Total 6 15

$2,000,000-over

Anne Arundel Co. 2 5

Baltimore City 0 0

Baltimore Co. 3 0

Carroll Co. 0 0

Harford Co. 0 0

Howard Co. 1 0

Total 6 5

- - Charles W. Jones : Sun Staff

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