Home sales rose 11.86% last month

Carroll Co. up 25%, Anne Arundel 17.33% and the city 3.62%

Nice weather, bad economy

Metro area prices jumped 12% to average of $166,682

February 13, 2002|By Robert Nusgart | Robert Nusgart,SUN STAFF

If consumers are concerned about the recession or a sluggish economy, it certainly hasn't shown in Baltimore's housing industry as good weather and low mortgage rates last month continued to push existing-home sales higher.

January sales increased 11.86 percent from those of January 2001, according to statistics released yesterday by Metropolitan Regional Information Systems Inc. (MRIS), the multiple-listing database used by real estate brokers.

In fact, just about every January indicator showed how healthy the real estate market continues to be.

The total dollar volume for homes sold last month in the metropolitan area grew by nearly $77 million, a 25 percent increase over January 2001.

The average sales price of a home increased to $166,682 from $148,729, a 12 percent rise.

The average listing price of the homes that sold rose to $173,584 from $156,173, an 11 percent gain.

Pending sales, an indication of future settlements, rose 10.3 percent over January 2001.

"I do think the weather has been a contributing factor to the activity level because we've had no winter," said Alan R. Ingraham, president of the Greater Baltimore Board of Realtors. "We've had some days that have been distinctly spring-like."

Ingraham, a regional vice president for First Horizon Home Loans MNC Division in Lutherville, also said interest rates have dipped since late December and are at 7 percent for a 30-year, fixed-rate mortgage.

Ingraham said those two reasons, along with "an economy in Baltimore that has not been thus far affected by the recession," are driving the strong housing sales. He added that the region's strength is "to a large degree because we don't have employment dominated by high tech or by manufacturing. We have a blend in between the two."

Every jurisdiction had gains in the month. Carroll County showed the largest increase, with a 25 percent rise in sales over January 2001, followed by Anne Arundel, with a rise of 17.33 percent; Harford County, up 16.3 percent; Baltimore County, 15.54 percent; Baltimore, 3.62 percent; and Howard County, 2.87 percent.

"It didn't start off gangbusters, but then all of a sudden we were off to the races," said Patricia Savani, who manages three Annapolis area offices as a partner with Champion Realty in Anne Arundel County,

"People are just generally optimistic and you can feel it," Savani said.

And they are paying more. The dollar volume in Anne Arundel County for January was $30 million higher than the corresponding period last year - "a staggering number," Savani said of the 39 percent increase.

One result of such strong sales activity has been a shrinking number of homes for sale throughout the area.

"Inventory? We still have a problem," said Cindy Ariosa of Long & Foster Real Estate Inc. "And in Howard County, it is absolutely ridiculous."

Savani likewise said buyers in Anne Arundel County "are definitely scrambling, looking for properties."

According to MRIS, the number of homes for sale in the metro area dipped to 8,559 at the end of the month, down 2.58 percent from 8,786 in December. The drop is more severe when compared with January 2001, when 11,029 homes were for sale, a difference of 22.39 percent; and January 2000 when 12,002 were on the market, a difference of 28.68 percent.

In Howard County, where the competition for homes can be fierce, families looking for single-family detached residences had only 375 listings to choose among. In January 2001, there were 479 on the market; in January 2000, there were 545.

"We are going to continue to have a supply problem," said Ariosa, who has been in the business 16 years. In a typical real estate cycle, she said, rising mortgage rates slow buyers and allow inventory to replenish. "But the buyers are not drying up, Ariosa said, and economists aren't projecting that rates will rise over 8 percent for at least three years.

"The only thing that is relieving us is a lot of these assisted living homes that are popping up all over the place, giving the elderly community an opportunity to move on. And that does free up some inventory for us so that is something on the horizon that will help us," she added.

However, Ingraham, the GBBR president, said he expects inventory to rebound as sellers, who took their homes off the market for the holidays, re-introduce them as spring arrives.

Still, after a record-breaking 2001, when more homes were sold than at any time in the last decade, Ingraham knows an encore will be tough. "You are riding a wave here and at some point it has to hit the coastline," he said. "The fact is, we had a very strong year last year. But it was a building trend that started in the March, April time frame.

"The question is, can we maintain that momentum against some very significant numbers in the last spring and the summer?"

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