Home prices in Maryland rose last year by 12.75 percent, the fifth-fastest pace in the nation, according to federal statistics released last week.
Maryland bettered the national average of 7.97 percent, the Office of Federal Housing Enterprise Oversight reported. Only Rhode Island, California, the District of Columbia and Hawaii outperformed Maryland last year in terms of average price growth.
Patrick Lawler, chief economist with the Office of Federal Housing Enterprise Oversight, credits a strengthening economy and extraordinarily low mortgage interest rates with fueling the price growth.
In Baltimore and its five surrounding counties, prices rose 13.27 percent, ranking the area 27th among metropolitan areas. The agency tracks conventional home loans purchased by mortgage giants Freddie Mac and Fannie Mae. Those loans are limited to $322,700.
Many Baltimore-area real estate agents said they are amazed at the thriving market. Sharon Blough, a vice president for Long & Foster Real Estate Inc. and manager at the Perry Hall office, calls the market "phenomenal."
"I've been in this business since 1986, and I've seen all kinds of markets," she said. "This is just unprecedented."
The biggest problem for buyers, Blough said, is finding a home in their price range that's for sale. There were 6,095 homes listed for sale in January in the Baltimore area, 11.2 percent fewer than in January last year, according to Metropolitan Regional Information Systems Inc., the Rockville listing service used by agents and brokers.
"As long as rates stay down, it will stay a seller's market," Blough said.
Benchmark 30-year mortgage interest rates hit a four-decade low of 5.21 percent in June. The rates have bounced up and down since then but have remained below 6 percent for much of that time.
Experts predict that rates will finish the year closer to 7 percent, but many expect the housing market to remain strong. And, although many expect price appreciation to slow, few predict a decline in values.
Home prices in Maryland rose 5.73 percent in the fourth quarter, which tied the state with Nevada for the fifth-largest increase in the nation. The national average was 3.67 percent.
S. Lawrence Yun, a senior economist with the National Association of Realtors, credits low inventory and spillover from the hot Washington area as reasons for Baltimore's housing strength. The Realtors group said the median price of a single-family home in the Baltimore area was $208,900 last year, an increase of more than 16 percent from the median a year earlier.
