Despite the nation's economic slowdown, the Baltimore metropolitan housing market continued bullish in February with sales of existing homes rising 45.76 percent over the same period last year, according to statistics released yesterday.
Data released by the Metropolitan Regional Information Systems Inc., the multiple listing database used by real estate brokers, showed all six jurisdictions recording double-digit increases.
Baltimore City recorded the largest rise -- 64.99 percent, with 589 existing homes going to settlement compared with 357 in February last year.
Baltimore County was next with a 46.88 percent increase; Anne Arundel County was up 45.31 percent; Harford County rose 39.52 percent; Howard County gained 26.7 percent and Carroll County was 21.21 percent higher than February 2000.
The rise was the largest month-over-month increase in the metropolitan region since March 1998 when sales that month soared 39 percent higher than those of March 1997. It also continued the upward trend in sales that began in September.
Few in the industry are expecting any kind of slowdown soon. Pending sales -- an indication of future settlements -- surged ahead by 33.18 percent over the same period last year, mortgage rates remained favorable, employment continued to be high and the market was still flush with buyers.
"When you watch the business news you hear all this gloom and doom, but reality is if there is a recession out there it hasn't hit real estate," said Patrick Welsh, president of the Greater Baltimore Board of Realtors. "Usually, we are one of the first ones to get hammered.
"All of the agents that I talk to, they are moving right along. Nothing has really changed. No one is crying that they don't have any buyers. Their problem is still the listing side of the situation," added Welsh, who is manager of the Eastern/Eastpoint office in Baltimore County for Long & Foster Real Estate Inc.
Most of the real estate agents' focus has been on inventory, which dipped to 10,897 homes for sale in February after rising to 11,046 in January. In February 2000, there were 11,962 homes on the market, while two years ago there were 15,271 homes for sale.
"It is a very difficult time for a buyer. It's not a fun time to be a buyer," said Candace Claster, an agent with Hill & Co., who said demand -- not Wall Street -- is the engine driving the housing market. "Basically it is economics 101. It is just that the demand is far greater than the supply. Basic economics."
The jitters over the stock market slide in recent days haven't translated into the mortgage market where rates are continuing to hover around 7 percent for a conventional 30-year, fixed-rate mortgage. Last week, the average in the Baltimore area was 7.09 percent. Nationally, the latest Freddie Mac survey dipped below that benchmark to 6.97 percent.
"February was a great month and March is going to be a very good month," said Bill Heffernan of First Home Mortgage, who said loan originations for his company are on the upswing.
"We are definitely busier than we were two or three months ago [and] are seeing a lot more activity with the Realtors in the marketplace. Unfortunately, we are still hearing the banter from a lot of Realtors that there isn't enough inventory," said Heffernan, who also heads the Maryland Association of Mortgage Bankers.
And much of the mortgage pipeline is coming from "tons of first-time buyers," according to Tom Champion, manager of Wells Fargo Home Mortgage in Lutherville.
"We are seeing a lot of FHA [government insured] loans, a lot of 97 percent loans -- 3 percent down payments -- those are very popular right now. They know it is a good time," said Champion, who added that most first-time buyers "are not affected by the stock market. They are affected by the cash that they've saved."
Although many popular neighborhoods in the city and surrounding counties still experienced price increases, prices on average began to dip or level off in February.
The average sales price for a home in the metropolitan area dropped 1.98 percent from the same period last year to $147,012 from $149,983. Single-family detached homes were down 1.21 percent to $215,715, while townhouses decreased a modest 0.06 percent to $102,981.
"One of the things that you are seeing is the spill over into other communities," Welsh said. "Dundalk is certainly getting better. Highlandtown is certainly getting better. So as a result, what you are finding is that people are buying in less expensive neighborhoods because they can't find what they want in higher-priced neighborhoods, or they are getting priced out and are looking in other areas."
But Welsh acknowledges that price inflation is continuing in more expensive areas such as Roland Park, Clarksville and the Annapolis waterfront.
"I don't know how we can run up prices any higher in these neighborhoods," he said. "Of course, I don't know, three years from now, [prices in] February 2001 might look like a deal."