Home prices in region up 18%

`Hot market': The pace of sales slowed in January, but there still were more buyers than sellers.

February 11, 2005|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

Home prices climbed 18 percent in the Baltimore area last month compared with a year earlier in a sign of continued strength for the local housing market.

Though the pace of home sales slowed last month, buyers still outnumber sellers, real estate agents said. And, they said, homes are selling relatively quickly.

The average sales price of a house in Baltimore and its five surrounding counties rose to $255,285 last month - up from $216,302 in January 2004, according to figures released yesterday by Metropolitan Regional Information Systems Inc. The median price in the region rose 25.47 percent to $215,000, meaning half the homes sold fell below that price and half above.

Sales rose 6.16 percent to 2,568 homes in the region compared with 12 months earlier, MRIS statistics showed. Homes stayed on the market an average 53 days - five fewer than in January 2004.

"This just keeps amazing everyone," said Henry A. Strohminger III, president of the Greater Baltimore Board of Realtors. "It's a hot market. Interest rates are still very good, so people want to act, and it's a secure way to spend money."

Home prices rose in each jurisdiction in the region compared with a year earlier. Baltimore had the biggest price gain - nearly 36 percent - with an average sales price of $137,295. But much of the metro area also posted double-digit increases. Prices were more stable in Anne Arundel, which had an average sales price of $352,153 - a 7.36 percent gain, MRIS said.

Celia Chen, director of housing economics for Economy.com, said consumers are reacting to strong employment growth and low mortgage interest rates. Rates on 30-year, fixed-rate mortgages yesterday averaged 5.57 percent, according to Freddie Mac's weekly mortgage survey, and economists expect rates to rise modestly, to about 6.2 percent by the end of the year.

"The economy is definitely picking up in Baltimore," Chen said. "That's part of the reason that the housing market has remained very strong."

But as interest rates begin to slowly rise, Chen said, the pace of sales has begun to slow in other parts of the country, such as the West Coast, where some markets have become overpriced.

Real estate experts in the Baltimore areas said they see no signs of a slowdown.

`High-end buyers'

"I don't believe there's a bubble coming at all," because demand continues to outstrip supply, said Barry Glazer, a broker with Century 21 Downtown, which has offices in Federal Hill and Little Italy.

"The city is now attracting high-end buyers," he said. "There was a time when a $1 million condo was unheard of, you'd see one or two on the market. Now, there are lots of million-dollar properties for sale."

Demand has been strong, he said, not only in areas such as Federal Hill, Canton and Fells Point, but others such as Brewers Hill, Union Square and Druid Hill, he said.

"Places where people were afraid to invest are now appreciating substantially," Glazer said.

Price appreciation has been a boon for sellers - especially those moving to lower-priced and less-competitive markets.

Wendy Stein put her 95-year-old, four-bedroom Victorian house in Mount Washington on the market two weeks ago. She plans to move closer to family in Traverse City, Mich. - a plan she said happened to co- incide with the strong seller's market.

Stein, who runs a public relations business, is asking $499,900 for the house she bought eight years ago for $165,000. She believes it won't take long to sell, noting that other homes in the neighborhood have sold for between $500,000 and $725,000.

"If I didn't want to go back home, there's no way I'd sell this house," she said.

Stein's agent, Azam Khan, with Coldwell Banker in Cross Keys, said homes that are priced right for the market are selling fast.

"Everyone gets hyped up about the market and, consequently, you'll get people who think they can get more money for the house than the market can bear," he said.

Sold in one day

Felicia Morgenstern recently sold her 1920s-era, three-bedroom house in the Evergreen section of Roland Park off Cold Spring Lane for the $325,000 asking price - one day after holding an open house that was limited to Realtors.

Morgenstern bought the house five years ago for $125,000 and renovated it.

A woman who attended the open house had her agent call Morgenstern's agent from the sidewalk after seeing the house. The offer was made and Morgenstern accepted.

"We never made it to the open house for the public," Morgenstern said. "God only knows what would have happened if we'd waited. ... But I could see she loved the home."

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