Area home sales dipped in Feb.

Average price rose to $294,105 despite growing inventory

March 11, 2006|By JUNE ARNEY | JUNE ARNEY,SUN REPORTER

Baltimore-area home sales dipped again in February, the fifth straight month of decline, amid signs that the market was steadying as it heads into the spring selling season.

The 2,439 homes sold in Baltimore and the five surrounding counties was down 9.97 percent, compared with February 2005, according to statistics released yesterday by Metropolitan Regional Information Systems Inc., a Rockville company that tracks homes sold through the multiple-listing service.

But the decline was less than in the preceding months, and the average sales price, which has fallen in five of the past seven months, notched upward to $294,105.

Compared with a year earlier, the average price gained 15.83 percent. Houses on average sold in 57 days, faster than the 60 days it took a year ago, even though the number of homes for sale was nearly double.

"The first two months [of the year] are hard, because the settlements are still things that sold in 2005, so it doesn't give you a true picture," said Katie Grove, president of the Greater Baltimore Board of Realtors and a Realtor with Coldwell Banker in Owings Mills. "The way I read it, however, we still have a strong market. But it has leveled off. I think there's going to be more inventory."

The region as a whole - and each individual county, except Howard - showed double-digit appreciation over February 2005.

The average sales price of a home in the region in February was $294,105, up from $291,337 a month earlier and about 16 percent above the corresponding period in 2005. The number of homes sold fell in nearly every jurisdiction, compared with February 2005, except for Harford and Carroll counties, where sales were constant. The biggest decline was in Baltimore City, where sales were down about 20 percent.

"There was clearly an increase in business in February over January," said Karin Batterton, a Realtor with Coldwell Banker Residential Brokerage's Roland Park office at Wyndhurst.

"Because we had a mild month, it brought out a lot of business. I just heard that some of the houses that went on sale last week or the week before are sold already," she said.

Yet, it hasn't been easy to make predictions about the spring market, Batterton said.

"It was hard to tell who was in control - the buyers or sellers," she said. "But we're beginning to see that, if it's a good product and it's priced well, it's off the shelf quickly. I expect a strong market. If sellers are realistic about the product they have to sell, and they're not trying to trump a neighbor, it's going to sell."

The number of homes listed for sale in the region rose by 215 over January's listings, with buyers getting 96.32 percent of their asking prices - more than a percentage point less than they received a year earlier.

"The fact that there is more inventory is bringing more buyers to the market," said Vito Simone, broker/owner of Simone Real Estate in Pikesville. "[Interest] rates being stable, with the hint of going up, is motivating people."

Yesterday's data offers good news for buyers and sellers, said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.

"Buyers can take heart in the continuing expansion of the active inventory, which signifies that they enjoy more choice in more neighborhoods," he said. "Sellers can rejoice in the fact that prices remain reasonably stable. Sales volume appears to be slowing. But given what was feared, I think such a gradual decline in home sales volume is quite acceptable."

In Baltimore, houses sold 31 days faster than in February last year. That's the main reason for the decrease in the average length of time it takes to sell a house in the region, said John McClain, deputy director for the Center for Regional Analysis at George Mason University in Fairfax, Va.

"That's a big drop," McClain said. "There are more people looking in that price range. Where prices are higher, there are fewer people looking at them. So the prices are not going up at as high a rate, and it's taking longer to sell those houses. The market is returning more to normal."

Dianne Clark, a 52-year-old first-time homebuyer, closed on her townhouse in Mariner's Cove in Essex on Feb. 28, nearly two years after a failed house-hunting experience in a much hotter market. That left a bad taste in her mouth.

"I had some serious issues with my Realtors," she said of her earlier experience. "I didn't feel they were working for me. I didn't think they were showing me houses I wanted to see. I just felt there was not a house out there for me at that time."

"There was so little on the market when she was first looking," said Ann Daniels, a Realtor with Long & Foster in Fells Point, who worked with Clark on her recent purchase. "People were settling on things they didn't even really want."

But the shifting market has forced people to do more improvements before they sell. For instance, Clark agreed to pay $169,900 - well over the $160,000 list price - after the seller agreed to paint, replace carpeting, and install a new refrigerator, stove and dishwasher. The seller then gave Clark a $5,000 credit toward improvements she would handle.

"It will be interesting to see what March and April does," said McClain, the university researcher. "Those are months when people are willing to make a move."

june.arney@baltsun.com

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