Home prices spurt in region on fewer sales

Baltimore City average goes over $100,000 for first time ever

Area volume off 3.16%

Experts say the market remains hot, however

September 17, 2002|By Paul Adams | Paul Adams,SUN STAFF

With too few houses for sale to meet demand, home sales in the Baltimore metropolitan region dipped last month while prices rose by double-digit percentages, including in the city, where the average price topped $100,000 for the first time.

Home sales fell 3.16 percent in August compared with August 2001, continuing a trend toward slowing sales in recent months, the Metropolitan Regional Information Systems Inc., the multiple-listing database used by local brokers, reported.

Real estate agents shrugged off the news, saying the market is still sizzling by historical standards.

"You're comparing against what was an extraordinarily strong year and you just can't continue to expect to exceed those [2001] numbers," said Alan R. Ingraham, president of the Greater Baltimore Board of Realtors.

Indeed, the biggest problem facing homebuyers continues to be a lack of inventory. With fewer homes from which to choose, buyers are bidding up prices to unprecedented levels. For the metro area, the average sales price was $195,927, an increase of 12.75 percent.

In Baltimore, the average sales price reached $101,572, topping the August 2001 average by 20.4 percent. Ingraham and others say the trend is being driven by a surge of buyers looking to return to the city, snatching up properties in hot neighborhoods such as Canton, Federal Hill, Charles Village, Mount Vernon and Bolton Hill.

"In talking to agents throughout the marketplace, everyone is still complaining that there still isn't any inventory," said Patrick T. Welsh, owner of Patrick T. Welsh and Associates in Dundalk. "As long as we keep having that kind of situation, we're going to continue to have a pretty strong market with these increasing prices."

Limited inventory and high prices are evident in sales statistics throughout much of the metro area.

Sales were off by 5.05 percent in Baltimore, 5.84 percent in Baltimore County, 9.43 percent in Carroll County and 7.16 percent in Anne Arundel County. Only Howard and Harford counties saw increases, of 9.28 percent and 8.72 percent, respectively.

There were 7,536 homes listed on the market in August, down 27 percent from the 10,312 listed in August 2001.

Pending sales, an indicator of future settlements, were 3,471 in August, down 1.8 percent from the previous month.

"A little bit of fall-off in volume is certainly not significant by any means," Welsh said. "What would be significant would be if we saw that kind of decline over a three- to four-month period."

Still, real estate agents have had to get creative to find homes for all of the willing buyers. In some cases, that means cold-calling homeowners in popular neighborhoods and asking if they would be interested in selling.

The situation has also forced buyers to move quickly when they find a property they like, real estate agents said.

"It's now 1:15 [p.m.], and if I put a house in the system at 1:30, I'm pretty sure that by 2 somebody is going to show it, and by tomorrow I'm going to have one contract, if not more, on that house," said Sharon Callahan, branch vice president of Coldwell Banker Residential Brokerage's Hampstead office.

The Carroll County brokerage is busy despite the 9.43 percent decline in sales for the county in August compared with August 2001 - the biggest decline of any county. And Callahan says prices continue to soar. The average price in Carroll County was $225,453 in August, up 11.87 percent from a year earlier.

Despite the wobbly economy and a potential war with Iraq, historically low interest rates are helping to keep buyers eager to stay in the market despite higher prices. Last week, the average rate for a 30-year, fixed-rate mortgage in the Baltimore area was 6.18 percent, down from 6.87 percent a year ago at this time, according to HSH Associates Inc., a New Jersey company that analyzes mortgages.

"Even though prices are up, falling mortgage rates help to offset those increases to a large degree," said Keith Gumbinger, a vice president with HSH Associates. "So home costs are probably not much higher than they were a couple of years ago."

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