Feb. sales of local homes rise 14%

City is tops in region with a 52% increase

March 11, 2004|By Daniel Taylor | Daniel Taylor,SUN STAFF

February proved to be yet another good month for housing sales in the Baltimore metropolitan area, though price growth appeared to cool from its double-digit pace, according to figures released yesterday.

Sales of existing homes in Baltimore and its five surrounding counties increased to 2,492 last month, 14.94 percent more than in February last year. The average selling price rose 6.5 percent to $202,208, according to statistics compiled by Metropolitan Regional Information Systems Inc., the Rockville real estate database used by brokers and agents.

Extraordinarily low mortgage interest rates and a skimpy supply of homes for sale have kept demand high for housing.

Experts had predicted that 30-year mortgage rates would rise to more than 6 percent by now, but the rates are closer to the four-decade low reached in June. The Mortgage Bankers Association said yesterday that rates averaged 5.34 percent nationally - down from 5.49 last week.

The falling rates have pushed more homeowners to consider refinancing their mortgages again. And they have continued to thrust more first-time homebuyers into a market in hopes that their monthly mortgage could match their rental costs.

Much of the metropolitan area's sales increase was centered in Baltimore, where 715 homes were sold last month - a 52.45 percent increase compared with sales in February last year. Sales also rose by double digits in Baltimore and Harford counties. They declined slightly in Anne Arundel and Carroll counties. Howard County's 231 homes sold marked the biggest drop in sales, with a 9.41 percent decline.

Cindy Ariosa, president of the Greater Baltimore Board of Realtors and an agent with Long & Foster Real Estate Inc., said the city appeals to many first-time buyers.

"It's the only place that has houses under $100,000," Ariosa said. "Everywhere else it's hard to find homes under $200,000."

Average prices rose in every jurisdiction last month compared with February 2003. They were highest in Howard County, rising 29 percent to $316,763. That was followed by Anne Arundel, at $279,954; Carroll County, at $268,622; Harford County at $198,435; Baltimore County, at $195,642; and Baltimore, at $100,970.

Home sales have reached record highs locally and nationally during each of the past three years. Sale prices rose by double digits during each of the past two years in the Baltimore area. Most experts predict prices will remain strong this year but not at the pace that many sellers have enjoyed.

It took an average of 64 days to sell a home last month - four days more than in February 2003. But more than half those sold spent fewer than 30 days on the market. Pending contracts, which offer a snapshot of future sales, were up 25 percent in February compared with 12 months ago.

And the hot housing market may be nowhere near finished.

Last week's lackluster jobs report likely means interest rates will remain low longer than expected, said economists for the National Association of Realtors and mortgage giant Freddie Mac. Maryland might not beat 2003 overall in sales, but it will come close, said David Lereah, chief economist with the National Association of Realtors.

Although Lereah doesn't expect 2004 to top last year's sales nationally, the low mortgage rates may prove him wrong. Even so, he said the job market is likely to regain some ground soon, accelerating a rise in interest rates. That could price some people out of the market, he said.

"I think eventually the job market will start to rebound and rates will inch upward, so probably we're just looking at the second best year ever," Lereah said.

But Frank Nothaft, Freddie Mac's vice president and chief economist, said his company is projecting 2004 to be even better than last year.

"With so much weakness in the labor market, it's going to help keep long-term rates low, and there's no pressure on the Fed to tighten up monetary policy," Nothaft said. "We may see a dip in rates below 5.5 percent."

Buyers and sellers continue to marvel at the market.

Rosalind Hogan expects to settle on a $575,000 home in Mount Airy on March 30. She owns other homes in the area and sold a Reisterstown townhouse for $136,000 this month. "There were seven contracts on that within a day [that it went up for sale]," she said.

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