Area housing market showing slower sales

More houses were put on the market in October than were sold

price appreciation at low for year

November 11, 2005|By JUNE ARNEY | JUNE ARNEY,SUN REPORTER

Metropolitan Baltimore's housing market in October showed continuing signs of a slow cool-off as new listings exceeded home sales and price appreciation slowed to its lowest level this year.

And, for the first time since January 2004, the number of houses sold in the area was smaller than in the comparable month a year earlier, according to new statistics from Metropolitan Regional Information Systems Inc., which tracks homes sold through the multiple-listing service.

Real estate and economic experts were reluctant to make much of a 0.69 percent decrease for one month.

"It's so negligible, it's not a sign yet," said Henry A. Strohminger III, a Realtor with Long & Foster in Timonium and past president of the Greater Baltimore Board of Realtors. "But if it continues, it could be significant."

The average cost of a house in the region was 14.7 percent higher last month than in October 2004, according to the MRIS statistics. Slowing was most evident in the higher-priced suburbs. Baltimore showed no signs of a slowdown.

"The numbers aren't as strong, but it's still strong," Strohminger said. "It's turning into more of a normal market than an out-of-control market. It continues to thrive."

Still, he noted that the number of new pending and contingent contracts did not exceed the new inventory, meaning that the number of homes on the market increased and provided homebuyers more choice.

Homes on average sold for 97.2 percent of their asking price, a fraction of a percentage point lower than a year earlier. They also sold four days faster than they did a year ago, spending an average 39 days on the market. That's one day longer than in September.

Buyers purchased 3,616 homes in the city and five surrounding counties in October, for an average price of $297,821. New listings totaled 5,707, down from 5,949 in September.

Anirban Basu, chairman and chief executive of Sage Policy Group Inc., said the October data "is consistent with the idea that we have passed the peak in home sales for this cycle."

"Even if this is not truly the peak for home sales in the Baltimore region, there still is evidence of slowing in the market," Basu said. "No one wants to be that buyer who buys when home appreciation is starting to slow."

Homes continued to sell faster in the Baltimore area, unlike in Montgomery County and other areas surrounding Washington, where homes sat on the market longer than in the previous year, said John McClain, senior fellow with the George Mason University Center for Regional Analysis in Fairfax, Va.

Farther out

One exception was Howard County, where prices are appreciating more quickly in more-distant places and moderating closer in, he said.

Prices have gotten so high in parts of Washington that people are going farther out to look for more affordable housing, McClain said.

October statistics show the average price of a Howard County home was 12.47 percent higher than in the previous year. The number of units sold fell by about the same percentage.

"If you had been thinking about living in Howard County, you might go farther north," McClain said, noting the popular industry quip "Drive until you qualify," which referring to the idea that people might travel greater distances to afford the kind of house they want.

The average home appreciation per year in the Baltimore area over the past 28 years was 6.5 percent, he said. So the 14.7 percent change from October 2004 to October 2005 is more than twice the long-term average, though a far cry from the 23 percent appreciation between October 2003 and October 2004, he said.

Celia Chen, director of housing economics for Economy.com in West Chester, Pa., said the statistics from the Baltimore area are consistent with anecdotal evidence of slowing coming out of Boston, New York and Washington.

`Topping off'

"It's slower in sales than in price appreciation," she said. "The market is topping off. People are getting leery of paying prices that have appreciated so much; affordability is low. Some of these factors have taken steam from buyers."

At the same time, sellers are willing to wait longer to get their price, she said.

Gayle Briscoe, an associate broker with Coldwell Banker Residential Brokerage in Ellicott City/Chatham, agrees that people still got their asking prices or more in October.

"It was still a spirited market, with the absence of some of the frenzy we'd seen in the past six months," she said. "In Howard County, they are staying around a little longer. Maybe instead of seven days, it's 30 days. It's still going to go."

Typically, homes are being sold as is this days, with home inspections being done "for information only," Briscoe said. Homebuyers finding a situation without those restrictions are willing to pay more, she said.

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