The stock market might be seesawing and a recession looming, but you wouldn't know it from local home sales. People are buying houses at a record rate, paying far more than the asking price in some cases.
Don't they remember what happened to those who bought at the top of the last boom, in the mid- to late 1980s? Will they, too, take a bath when it comes time to sell?
It seems that buyers aren't worried. Real estate agents, conceding that they don't have a crystal ball, say they don't foresee a hard landing when this market cools. At worst, they say, prices will level off.
"You can't expect prices to go in a straight line [up] forever," said Arthur Davis, president of Chase Fitzgerald & Co. in Roland Park. "You'll find a period of just being flat. That's a more-likely scenario than actually declining values. Once the prices are there, they're pretty much almost locked in."
So not to worry?
Appraiser Tom Pirritano thinks today's over-the-top buyers could find themselves on the losing end of the deal when it comes time to sell.
"From an appraisal standpoint, we're finding it difficult to justify some of these prices," said Pirritano, an appraiser with Pirritano & Associates in Ellicott City. "The real test will be when some of these people start moving, in anywhere from 12 to 24 to 36 months. Then we'll see what the real impact of this is going to be."
Pirritano, an appraiser for 25 years, has seen booms come and booms go. In the last previous slump, in the late 1980s and early 1990s, some sellers wound up bringing cash to the settlement table.
"After the last intense market that we had, when property values corrected themselves, people who bought who were now sellers found themselves having less equity in the house than they thought they had," Pirritano said. "The loan amount was greater than the sale price."
"Do I think that's going to happen to some people at the end of this market? The answer is yes."
Nancy Hubble, a real estate agent for 44 years and a vice president of O'Conor, Piper & Flynn ERA, recalls the last boom - and bust - cycle well.
"A lot of people paid top dollar for houses and, when the market dropped, people who had to sell got hurt," said Hubble who works out of the Greenspring office in Baltimore County. "People who could stay did just fine."
Her message to buyers is: "If you need to sell in a hurry, maybe this isn't a market to be wheeling and dealing in."
Hubble and other real estate agents do not think the local housing market is heading for a tumble like that of the late 1980s and early 1990s.
"I don't think this is going backwards," said Marc Witman, an associate broker at Long & Foster's Greenspring office and a past president of the Greater Baltimore Board of Realtors.
The areas where people are noticeably paying more than list price - primarily Roland Park, Guilford, Homeland and Mount Washington in Baltimore, western Howard County and waterfront areas near Annapolis - will remain strong, he said, adding, "They have fundamentals that aren't changing with the frivolities of the stock market."
Higher prices elsewhere
The real story, Witman said, is that Baltimore real estate has been undervalued and is finally catching up.
"People who are coming into the market from elsewhere, or people who have traveled and know other places - those people know that these houses would cost more" in other parts of the country.
In short, Witman said, Baltimore has had an "inferiority complex."
"These houses aren't worth $350,000," Witman said, speaking generally of homes in Baltimore's tonier neighborhoods. "They're worth $550,000."
Jim Tennies and his wife, Christine, couldn't agree more. They recently paid $95,000 over the $485,000 asking price for a house in Roland Park and think they got a great deal.
"I'm not trying to be naive about it, but I don't think we paid over the market value of the house," said Jim Tennies, who left Legg Mason Wood Walker Inc., in the summer last year and started an independent financial-services firm with a partner.
"I don't think there's been any 10-year period where houses in Roland Park have declined in value in the last 30 years," Tennies said.
With two children in private schools in Baltimore, the Tennieses decided they didn't want to drive every day from Catonsville, where their home is still on the market.
They looked at houses in Homeland, Ruxton, Guilford and Roland Park, figuring they would pick the house they liked best. Then they fell for Roland Park.
"We walked around the neighborhood and said, `It doesn't depend on the house. It has to be in Roland Park,'" Jim Tennies said.
Sitting on the wide, wraparound porch of their turn-of-the-century house, it is easy to understand why. Their son and his friends thunder down the big staircase and out the front door, one kid doing a handspring off the steps. Next door, a pianist plays Chopin. Once in a while a car goes by. The entire neighborhood is in bloom.
"The kids call it the happy house," Tennies said. "They're just delighted."