Region's homes still selling at brisk pace

Analysts see hints of slowdown, however

City's gains are strongest

May 11, 2002|By Robert Nusgart | Robert Nusgart,SUN STAFF

The housing supply might still be skimpy, but Baltimore-area buyers are still purchasing homes at a rapid pace, as existing-home sales last month rose 6.81 percent over those in the corresponding period last year.

The rise marked the 20th consecutive month of higher sales, according to statistics released yesterday by the Metropolitan Regional Information Systems Inc., the multiple-listing database used by brokers.

"I'd love to think that we are going to stay in this kind of market, but we are going up an ever-increasing challenge to match last year's numbers, because last year was such an extraordinary year," said Alan R. Ingraham, president of the Greater Baltimore Board of Realtors. "So to continue to expect 5 or 6 percent growth over those numbers, if it took place, would be extremely unprecedented."

Baltimore's growth was the strongest in the region. Sales climbed 21.63 percent higher than those of April last year. Baltimore County sales rose 10.51 percent, followed by Carroll County, up 7.41 percent, and Howard County, up 3.62 percent.

Harford County had the biggest decline, 9.09 percent, and Anne Arundel County sales were down 4.18 percent.

The housing market - buoyed by mortgage interest rates that again have dropped below 7 percent - is showing few signs of entering a summer slowdown. Pending sales, an indication of future settlements, were 3.56 percent higher than in April last year.

Yesterday in Baltimore, the average interest rate for a 30-year, fixed-rate mortgage was 6.9 percent, according to HSH Associates, a New Jersey firm that tracks and analyzes mortgages. Nationally, the 30-year fixed rate was slightly lower, 6.78 percent, according to the Freddie Mac weekly survey.

"We are down pretty close to where we were at our lowest levels in October and November," said Ingraham, who also is a regional vice president for First Horizon Home Loans, MNC Division. "We were basically at 6 3/4 and 6 5/8 and zero points on a 30-year fixed, [and] as a consequence, that has given a new stimulus to some of the activity that allows us to sustain this momentum."

HSH Vice President Keith Gumbinger said rates hit "an unexpected dip" for two main reasons: First, money has been flowing from a sluggish stock market into the bond market, which pushes bond yields lower, where mortgages take their cue. Second, the Federal Reserve decided not to increase short-term rates.

"Rates are probably more likely to be in a trough right now and rising over the next couple of months," Gumbinger said.

With rates continuing to be favorable, buyers are staying in the market and consequently keeping the pressure on the housing inventory. Last month, 7,762 properties were listed in the area's multiple listing service, up from 7,705 in March. In April 2001, 10,955 properties were listed.

"I know that Randallstown ... carries a lot of listings ... and they are way down in active listings from where they typically are," said Donnell Spivey, an agent with Re/Max Columbia, whose territory extends into Baltimore County.

"Typically, I'm considered a listing agent, and right now I'm working with more buyers. I have about seven listings, but only two that aren't under contract. Usually I carry about 15 listings."

David Desser of the Pikesville office of Prudential Carruthers Realtors said that three years ago the office would carry almost 100 listings but now "we have 25 or 20. ... The whole thing is way off."

"One of the things that I think is happening," said Spivey, "is that people who would like to sell can't afford to sell. There are a lot of people living in their houses that can't afford to buy the houses that they are currently living in. So if they sold, they couldn't afford to trade up."

Housing values continue to climb in the area. The average sales price last month in the Baltimore metropolitan area rose to $166,458 from $155,121, a 7.31 percent gain since April last year. The dollar volume last month rose to $530,335,163 from $462,727,061 for April of last year, a 14.61 percent rise.

For all of the strong signals, Desser, like Ingraham, is hesitant to predict a strengthening market for the rest of the year. "We are on the fringes, a hint of little bit of a slowdown," he said.

Ingraham said, "I do sense some frustration on agents' parts and buyers' parts because there is such a distinct limit in the inventory. People, after four or five contracts, fail to get the house they want, tend to pull back and say, `I'm just going to sit and wait.'"

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