A red-hot housing market limits choices

Real estate: Housing in Anne Arundel County is among the state's most expensive, and land for building new ones is hard to come by.

May 16, 2004|By Nancy Jones-Bonbrest | Nancy Jones-Bonbrest,SPECIAL TO THE SUN

When Phil and Pamela Monetti outgrew their home of 17 years in Severn, they thought they would buy land and build a house. But they discovered that there was no land to be had.

The couple, both self-employed with home offices, then decided to look for an existing house in the county. When they couldn't find something that fit their needs, they bought a new home in the Severn community of Cayuga Farms, about eight miles from their previous house.

"We thought a [building] lot would be easy to find. But we couldn't find one anywhere," said Phil Monetti. "We had kind of given up, then Pamela came across the trailer for the community.

"We are really happy with the location. We still see our friends, go to the same church. It's really convenient."

Miles of waterfront homes, a historic state capital and proximity to two major metropolitan areas have buyers scrambling to purchase homes in Anne Arundel County.

The heavy demand has led to soaring home values, making it some of the most expensive housing in the Baltimore area.

"We haven't seen a slowdown, and we are heading into the hottest months of the year, the spring market," said Nicki Kaukonen, with Coldwell Banker Residential Brokerage and president of the Anne Arundel County Association of Realtors.

Location is one key to the county's success, said Kaukonen.

"Being between Baltimore and Washington and having the water is a big draw," she said. "Also Annapolis. It's a quaint little town everyone hears about and knows about. And there's the beauty of Anne Arundel County; it's a great location."

Anne Arundel County was the second-most-expensive county in the Baltimore area for existing residential housing last year, with an average sale price of $282,640, according to the Metropolitan Regional Informational Systems Inc. (MRIS), which tracks the sales of existing homes.

In Baltimore County, existing homes averaged $194,575; in Carroll County, the average was $251,509; and in Harford County, the average was $197,669. Only Howard County was higher in the Baltimore area, with an average of $296,274.

The average home price in Anne Arundel County was 17.23 percent higher in March than it was the year before, according to MRIS. Inventory remains low, with about 1,000 active listings for existing homes countywide.

"That's our biggest problem," said Connie Morrissette, manager of the Annapolis Plaza Coldwell Banker Residential Brokerage. "Homes that are $350,000 and below seem to be commanding multiple offers. But we are also seeing escalation clauses that take the price well above what it was listed for because there are six or seven offers."

Fueling the frenzy, said Morrissette, are buyers who want to purchase while interest rates are still near record lows.

While the lack of inventory is tying the hands of real estate agents, a lack of available land is creating problems for builders.

"There's a big shortage of approved building lots compared to demand," said Michael DeStefano, president of Annapolis-based Sturbridge Homes. "As soon as you build them, they are gone."

Sturbridge developed Cayuga Farms, where the Monettis live. It is also building Whitehall Manor, a waterfront community of 12 homes in Annapolis, and age-restricted condominiums at the Village at Waugh Chapel in Gambrills.

This year, the company will start marketing Monticello, a high-end development of single-family homes off Bestgate Road. The homes there are expected to sell for $700,000 to $800,000.

For homebuilder Ryland Homes, new houses are selling as well as ever.

"We would take every buildable home site we could; unfortunately there are so few," said Earl Robinson, vice president of sales and marketing for Ryland Homes. "Demand far exceeds supply."

The Enclave at River Oaks community in Edgewater near Annapolis is an example. Of the community's 103 townhouses, which start at about $350,000, 15 are available.

"With the location just south of Annapolis, we are getting empty-nesters moving near the water, young professionals who work in Annapolis and a few couples where one spouse works in Baltimore and the other in Washington," Robinson said of the Enclave at River Oaks.

Ryland, along with Koch Homes, is selling the Retreat at St. Margaret's Landing in Annapolis, where the single-family homes start at about $450,000.

Housing styles and prices run the gamut in the county from spectacular waterfront estates and one-of-a-kind historic homes to modest single-family houses, townhouses and condominiums. Age-restricted communities have made their way into the market. Farmland is still available in some parts of the county.

With the average price of a home in Anne Arundel County near $300,000, the lack of affordable housing has many worried that middle-class buyers will be forced out of the market, especially if prices continue to rise.

The best bargains in the county are existing homes in places such as Glen Burnie and Harundale. Also, lower-priced homes can be found at the western and southern edges of the county.

The county government has targeted growth areas in the western portion of the county, including the Baltimore-Washington Parkway corridor and Odenton.

The Parole area is also a growth area. Conservation efforts are focused mainly in southern Anne Arundel County and along the water.

Dean Cottrill, manager of the Long and Foster Severna Park office and incoming president of the Anne Arundel County Association of Realtors, said every part of the market - condominiums, townhouses and single-family homes - has risen in value.

"The proximity to the water and the number of amenities offered is a major factor in the value of the land and the property on the land," said Cottrill. "Most purchasers would love to live on the water, but when talking about appreciation, we have seen both waterfront properties and nonwaterfront properties increase in value."

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