Rise in local home sales slows a bit

Aug. has smallest monthly gain since December, up 6.94%

Pending sales cool off

Numbers are helped by strong showing in Baltimore County

September 11, 2001|By Robert Nusgart | Robert Nusgart,SUN STAFF

In what may be a subtle warning to the Baltimore real estate market, sales of existing-home sales for August rose by 6.94 percent over the same month last year, marking the smallest monthly gain since December.

Throughout the year, the industry has enjoyed double-digit month-over-month increases, putting 2001 on a pace to surpass last year's sales total, the highest in the past 10 years.

Pending sales, typically a barometer of future settlements, also rose at a lower pace.

Pending sales, which until last month also had double-digit increases throughout this year, rose 5.41 percent. That increased paled when compared with the previous three months where July showed a 15.22 percent rise, June, a 14.38 percent gain and May, up 16.78 percent in contracts signed.

If not for the strong showing in Baltimore County, where home sales grew by 17.54 percent and where so many of the region's homes are sold, the sales figures for August could have been much worse, according to statistics released yesterday by Metropolitan Regional Information Systems Inc., the multiple-listing database used by brokers.

Sales in Anne Arundel County were up 11.58 percent; Baltimore City gained 5 percent; and Carroll County was up 3.93 percent.

In Harford County, where sales had been booming throughout 2001, settlements dropped 5.25 percent, while in Howard County sales sagged the most, down 8.01 percent.

"Real estate markets are like any other market, sooner or later it is going to slow down some ... it just depends on how much it slows down," said Patrick Welsh, president of the Greater Baltimore Board of Realtors.

"The problem is you are trying to beat last year's great numbers and even if we soften a little bit, I'm not so sure that it would be such a terrible thing, because [those numbers] are still going to be so much better than anyone could have predicted. ... "

Although Welsh admitted the market may be softening a bit, he said sales in the metropolitan region still "amaze me, and I'm not really sure what we can attribute it to because we are clearly bucking the national trend."

Nationally, existing-home sales on an annualized basis have begun to slow.

Through July, existing-home sales slowed 3.0 percent to a seasonally adjusted annual rate of 5.17 million units from a pace of 5.33 million units in June, according to the National Association of Realtors. August statistics will be released this month.

The one aspect of the market that isn't retreating is what buyers are paying. The average sales price in August rose 5.15 percent over August 2000, climbing to $173,625 from $165,129. A single-family detached home with four or more bedrooms in the Baltimore market rose to $310,535 from $277,888, an 11.75 percent increase.

Even so, Pat Hiban, a top producer for Re/Max Advantage in Howard County, sees the market "taking a pause" after "an incredible summer."

Hiban, attributed part of the slowdown to buyers settling in for the start of the school year. But he couldn't ignore the fact that a weakened stock market has had some effect.

"Everybody has less money today, than they did a year ago," Hiban said. "I don't know a person you could talk to today who is richer than they were a year ago, and obviously that has an effect."

Hiban said he had 42 settlements in July, but "now it is a struggle to keep 10 on the books," adding that the Howard market remains vibrant for buyers in the $150,000 to $170,000 range, but the over-$400,000 market has slowed.

Karen Bisbee, a vice president for O'Conor, Piper & Flynn ERA who deals in the luxury market primarily in Baltimore County, also says the loss in equity markets has been felt, but she still sees a "pent-up demand" for property and that her buyers have shown "no unique hesitation."

"Quite a lot of people have had tremendous success in the stock market and even though they've seen setbacks in their accounts, they are still substantially ahead of where they started three years go."

Even so, Hiban believes that despite favorable 30-year, fixed-rate mortgages, which in recent weeks have dipped below 7 percent, the market overall may not have the intensity that it had in previous months.

"It's great to have a good rate, but if you don't have any cash in the bank, you don't feel like moving as much," he said.

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