Baltimore-area home sales lost some of their frenzy last month, but prices continued their steep ascent, registering another double-digit increase.
Sales in Baltimore and its five surrounding counties rose to 3,304 homes, an increase of 1.85 percent compared with October 2002 - the smallest increase since April, according to figures released yesterday by Metropolitan Regional Information Systems Inc. in Rockville.
But the average sales price jumped to $210,439 - 11.79 percent above a year earlier. It marked the seventh consecutive month that prices rose by double-digit percentages.
Home prices were highest in Howard County, with an average of $297,557. That was followed by Anne Arundel, at $271,417; Carroll, $264,580; Harford, $206,000; Baltimore County, $195,952; and Baltimore, $113,689.
Real estate agents attributed the slower rise in sales to a slight uptick in mortgage rates in August and delayed sales as a result of Tropical Storm Isabel in September. October's sales figures represent deals that likely were agreed to during those prior months.
Most agents said sales remain healthy but had cooled from the summer's sizzling pace.
"We're actually seeing houses go on the market and not sell right away," said Pat Hiban, an associate broker with Re/Max Advantage Real Estate in Columbia.
"There are instances where the energy and fear is still there - that people are going to lose out. But we're not seeing that for every single house like we were in the summer," Hiban said.
Home sales have been the most consistent driver of the economy during the past two years, thanks to extraordinarily low mortgage interest rates. The benchmark 30-year mortgage rate stood at a national average of 5.98 percent last week, according to mortgage giant Freddie Mac. In June, that rate hit a 45-year low of 5.21 percent.
The Mortgage Bankers Association of America estimates that rates will average 6.2 percent next year - up from 5.8 percent in 2003.
The low rates have helped more people afford homes and have pushed homeownership to record levels. Most housing experts predict that interest rates will rise during the coming months as other sectors of the economy improve. That, along with continued uncertainty in the job market, likely will slow sales and price appreciation, economists said.
"We're going to see a lot of markets where the increases are going to be much more modest," said Ingo Winzer, president of Wellesley, Mass.-based Local Market Monitor, which tracks housing values.
But one indicator signaled that Baltimore-area sales are headed up: Pending sales in October rose 5.92 percent to 3,581 contracts.
It took an average of 44 days to sell a home last month - 11 days fewer than in October 2002. Real estate agents said the supply of homes for sale remains limited, though not as tight as it was several months ago. There were 7,530 active listings last month - a 3.54 percent decrease from this time last year.
Home sales posted all-time highs during the past two years and are on pace to set records in 2003. Sales in the Baltimore area stand at 33,041 homes - 6.46 percent higher than for the first 10 months of 2002. The National Association of Realtors is predicting that home sales nationwide will grow 7.7 percent this year to 5.99 million units.
Because interest rates have remained below 6 percent for much of the year, the national Realtors' group predicts that the median price for an existing single-family home will rise 8.8 percent to $172,100 this year. That would surpass the record year for appreciation set in 1979, when resale prices rose 14.4 percent to $55,700. Prices rose 7 percent last year to $158,200.
Though local experts said demand for housing remains healthy, they do expect fewer first-time buyers to keep shopping as the year wears on.
"We usually see a slowdown during this time of year," said Shanelle Shakoor, housing director for the Greater Baltimore Urban League, which offers seminars to first-time buyers.
"Many people like to wait until they can get their tax refunds during the early part of the year."