Region's home sales slow, but inventory, prices rise

March shows 13% decline with the real estate industry entering its peak spring season

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

Home sales in the Baltimore region dipped in March, the sixth straight month of decline over the previous year, and the buildup of inventory escalated as the market headed into the crucial spring selling season.

Pricing, however, remained strong, posting double-digit gains over a year earlier.

The 3,170 homes sold in Baltimore and five surrounding counties was a 13 percent decline from March 2005, according to figures released by Metropolitan Regional Information Systems Inc., a Rockville company that tracks homes sold through the multiple-listing service, reported yesterday. Sales dropped in every jurisdiction except Harford County.

But the number of home sales was higher than in February, and the average selling price edged upward for the third consecutive month, suggesting that the region might be better positioned to weather rising interest rates and worries about a housing bubble. Rates on 30-year mortgages averaged 6.43 percent last week, the highest in 2 1/2 years.

"There is no burst," said Katie Grove, a Realtor with Coldwell Banker in Owings Mills and president of the Greater Baltimore Board of Realtors.

"Really everything is up, except the units sold. Sellers are still getting their prices. The higher-priced homes are not being sold in the numbers as before," Grove said.

Baltimore is not seeing the cooling in the housing market that the Washington region is experiencing, said John McClain, deputy director for the Center for Regional Analysis at George Mason University in Fairfax, Va.

"Where prices are affordable, we're still seeing double-digit price increases," McClain said.

Job growth in Baltimore, coupled with the spillover of Washington homebuyers looking for affordable housing, has helped fuel demand for housing in the city and its surrounding counties, he said.

The average sales price of a home in the region in March was $295,334, up 14.06 percent over a year earlier and about $1,200 more than in February.

Prices soared most in the city, soaring 26.5 percent in a year, and least in Carroll, up 3.32 percent .

Houses on average sold in 59 days, four days slower than a year earlier, even though the number of homes on the market - 12,091 - was more than double in the previous year.

"We seem to have entered a soft landing cycle," said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc. "Gone are the dramatic month-to-month increases in home prices, gone is the period of dwindling inventory of homes for sale.

"In its place is a sharp increase in inventory from month to month, which suggests that demand for housing continues to wane in the face of rising interest rates. If anything, further softening is likely," Basu said.

What will be interesting to watch is how days on the market adjusts in the months to come, Basu said.

Additional inventory could make it easier for people to find a new home, and therefore shorten the days on the market. But, because each home has competition from so many other homes, homebuyers may take their time looking, he said.

"It's a great opportunity for buyers," said Cindy Ariosa, regional vice president for Long & Foster's Baltimore/Southern Pennsylvania region.

`Stars are aligned'

"Last year's season we had very little to sell people. There were lots of disappointed people walking around. [This year] the stars are aligned."

But those looking for affordably priced homes aren't likely to have an easy time, particularly in a desirable neighborhood. A decent house priced at $200,000 and under "flies off the market in a day," she said.

Tracy Kartye, 33, and her husband, Bill Shockney, found out just how tough it can be to land a home when they put in a contract on an Ednor Gardens house. The couple came up short in a bidding triangle, despite including an escalation clause for $6,000 over the asking price. The successful buyer offered $10,000 above the asking price, Kartye said.

"It was a little surprising," she said. "I didn't really think that the market was that competitive."

In two trips from Houston and additional open houses and shopping trips with a Realtor once they arrived, the couple looked at about 50 houses - all but one in Baltimore City.

$201,000 house

They ended up spending $201,000 for a house in Hampden after talking the seller down almost $14,000 because of the worn condition of the kitchen and bathroom - a 1,350-square-foot, brick rowhouse, built in 1920, with a stone porch and white columns on a tree-lined street.

"We went into it thinking there would be some flexibility with the price," said Kartye, who closed on the house March 31. "I think we're both very happy with it. We think it's a very good house. I don't know that it was a steal."

"I think we had an expectation that we'd be able to buy more than we did," she said. "We thought we'd be able to move into a more marginal neighborhood and get more for our money. But we didn't find that."

june.arney@baltsun.com

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