March takes wind out of house resales

1.2% rise is worst showing since August 2000 decline

Falling inventories are blamed

Metro area still has plenty of buyers, agents say

House resales slow to 1.2% gain in March

April 12, 2002|By Robert Nusgart | Robert Nusgart,SUN STAFF

After a strong start to 2002, sales of existing homes in the Baltimore metropolitan area nose-dived in March to the smallest monthly gain in the past 19 months, rising just 1.2 percent over the same period last year.

But the cooling off in sales isn't worrying real estate agents, who say the market continues to be as robust and competitive as ever, with many more potential buyers than sellers.

The dip "is certainly not for lack of interest," said Melvin Knight, an agent in the Wyndhurst at Roland Park office for Coldwell Banker Residential Brokerage.

What may be contributing to the lower gain in sales is that hunting for the perfect home is becoming much tougher as the number of residences for sale in the area continues to slide.

According to statistics released yesterday by Metropolitan Regional Information Systems Inc., the multiple-listing database used by brokers, the number of homes listed for sale in the Baltimore metro area dropped to 7,705 homes, down almost 6 percent from February's 8,195.

In March 2001, there were 10,866 homes on the market; the previous year, 12,113; and in March 1997 - just as the Baltimore housing boom began - 18,920 were listed, meaning that in five years inventory has shrunk 59.3 percent.

In Baltimore County last month there were 1,814 homes for sale. In March 1997, Baltimore County buyers had a choice of almost three times as many properties, with 5,262 homes being listed by real estate brokers.

Consequently, buyers are having a harder time finding a home, and when they do, many times, according to agents, they are battling other buyers and getting into bidding wars, thus driving prices up.

"Because of the limited inventory, you are almost getting into an auction situation," said Alan R. Ingraham, president of the Greater Baltimore Board of Realtors.

"We have people fighting over houses, literally," said Cathy Werner, owner of Re/Max American Dream, which has three offices in Baltimore and Harford counties. "If you are not the strongest buyer, you are not getting the house."

Jo Ann Kline, an agent in Werner's office who has been selling homes for 12 years, said inventory is so tight she is seeing some of her buyers "making decisions on homes that they are not exactly looking for. They are settling for a little bit less just to make a purchase."

Pending sales - an indicator of future settlements - were down 3.4 percent when compared with March 2001.

The drop in sales, however, didn't faze Ingraham, who said it would be difficult to continually post higher sales figures in 2002 after such a strong housing market in 2001, when the region posted its best year of home sales in the past decade.

"We are in a scenario where it becomes more and more challenging to meet or exceed the previous year's numbers, which were outstanding," he said.

The March increase was the weakest month-over-month performance since August 2000, when sales were off 1.4 percent.

Carroll County had the largest increase of all jurisdictions with a 7.7 percent gain over the same period last year. Baltimore County was next, up 7.2 percent; Harford County rose 6.4 percent; and Baltimore City was up 0.6 percent.

Anne Arundel County dropped 2.4 percent, and in Howard County, sales were off 11.1 percent.

"People are out there trying to get a house, making full-price offers repeatedly, and somebody else gets the house because they didn't ask for a radon inspection and you did. It is a seller's market," said Coldwell Banker's Knight, adding that he's seeing "city prices going up."

In fact, sales prices increased in each jurisdiction.

The average sales price for a home in the metro area rose in March to $169,501 from $150,221, a 12.8 percent increase, when compared with March 2001. Baltimore County had the biggest percentage gain - 27 percent - as the average price rose to $173,358 from $136,534. The average price for a Baltimore home increased to $82,446 from $69,294, a 19 percent gain.

And with the height of the spring market on the horizon, Werner said the "frustration level is very high for buyers as well as agents"; therefore, buyers should be prepared to "write several offers on several different houses."

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