Prices of homes in region gain 17%

Jan. data also show sales rose nearly 10%, continuing record pace

Sales of homes rose nearly 10% in Jan.

prices gained 17%

February 11, 2003|By Trif Alatzas | Trif Alatzas,SUN REAL ESTATE EDITOR

Baltimore metropolitan area homebuyers kept on spending in January, pushing existing-home prices up almost 17 percent and continuing last year's record sales pace.

Sales in the five-county area and Baltimore rose 9.89 percent, compared with the corresponding period a year ago, to 2,467 units, according to figures released yesterday by Metropolitan Regional Information Systems Inc., the listing service used by agents and brokers.

The average sale price in the five-county area and Baltimore rose 16.98 percent, compared with January 2002, to $194,993.

Home sales set records during the past two years, making housing one of the few bright spots in an otherwise lukewarm economy.

As stock market losses mounted, mortgage interest rates fell to their lowest level in almost 40 years and have stayed just below 6 percent for the past several weeks.

While the rates have helped push many new homebuyers into the market, there does not seem to be enough homes to meet the demand.

The housing inventory in the Baltimore area was down almost 20 percent, compared with January 2002, to 6,864 homes. And homes that reached the market did not last long - the average house took 62 days to sell last month - 16 days faster than in January 2002.

On Saturday, Angela Eiferd and her family moved into their new home in Belcamp after searching for months to find a home closer to her husband's job. The family, which moved from York County, Pa., lost out on three different homes because other buyers bid more than the asking price.

"If you see something you like, you better put a contract in for it," Eiferd said. "And you should at least make sure you offer what they're asking."

Pending sales - a snapshot of future activity - were up 6.57 percent compared with January 2002.

Several agents said they have noticed a steady increase in activity in the new year, primarily because buyers want to take advantage of the interest rates.

Most economists and the National Association of Realtors have predicted that 2003 won't match last year but still will be healthy.

"People are done with the holiday and they're settling down and thinking about what they're going to be doing," said Stanley Groves, an agent with ReMax Advantage Realty in Carroll County.

Housing sales in Baltimore posted the best increases in the area, rising 16.18 percent to 632 homes, compared with January 2002. Sales increased in each jurisdiction except Harford County, where the figures dropped 6.54 percent to 200 houses last month.

Average prices rose in each county and in Baltimore. Carroll County posted the highest percentage increase - 28.1 percent to $250,993.

Some economists worry that housing prices may be rising too fast and spoiling sellers who have enjoyed rapid value increases during the past year.

But most housing experts said that prices continue to grow because consumers prefer to invest their money in real estate instead of the stock market and are confident in the strength of housing as an asset.

The Mortgage Bankers Association of America said it expects 30-year fixed mortgage rates to reach 6.8 percent by the end of the year.

The rates averaged 5.88 percent last week, according to Freddie Mac, the No. 2 buyer of U.S. mortgages.

"It is a hard to find a better set of conditions," said Keith Gumbinger, vice president of HSH Associates of Butler, N.J., who studies mortgage rates.

Local real estate agents said they have plenty of buyers looking to purchase.

And the listings they have, agents said, are not expected to last long.

"It is generally a slower month, so to see these increases - it's awesome," said Jan Hayden, president of the Greater Baltimore Board of Realtors. "If we can sustain it, that's another thing, but time will tell."

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