No records expected for home sales

Spring home market begins at pace much less hectic than past 5 years

May 14, 2006|By MARINA SARRIS | MARINA SARRIS,SPECIAL TO THE SUN

What a difference a year makes.

The days of homes being snatched up in bidding wars within days of going on the market seem to be gone.

Anne Arundel County opened its busy spring real estate season with a market that was noticeably less frantic than the one that greeted home buyers and sellers this time last year.

"We think it's going to be a good year, but it won't be a record year like the last five have been," said Tom Quattlebaum, chief executive officer of the Anne Arundel County Association of Realtors Inc. "There will be some market correction."

Homes that sold in March spent an average of 62 days on the market, almost a third longer than they did in March last year, according to data from Metropolitan Regional Information Systems (MRIS).

Buyers' good news

While that might inconvenience sellers, the good news for buyers is that there are more homes on the market at any given time from which to choose.

In Anne Arundel County, buyers could pick from 2,950 active listings of houses, townhouses and condominiums in March, more than double the number of homes for sale in March 2005.

More homes means more leverage for buyers.

"You're seeing buyers with more arrows in their quiver because they know they're not competing with an immediate offer from another buyer," said Thomas Hough, Realtor at Champion Realty in Severna Park and president-elect of the county Association of Realtors. "You see buyers asking for concessions."

"We're returning to a market that's not as geared to the seller's end, and it's shifting more to the middle," said Dave Wright, broker associate at Coldwell Banker Residential Brokerage in Annapolis and president of the county Association of Realtors.

"We're not seeing as much the multiple contracts on a property," he said. "The general state of the market is not as frantic as it has been in the past."

The calming or stabilization of the market is not a bad thing, he said.

"In my opinion, a Realtor's worst nightmare is multiple offers," Wright said. "It just creates a lot of franticness and tension because someone is going to lose, and someone is going to be unhappy."

Rates `inching up'

Mortgage rates might have played a part in the current climate. "The inching up of the mortgage rates has caused some of the slowdown, but the interest rates, historically, are still excellent," Hough said.

The average rate for a 30-year mortgage reached 6.43 percent in early April, the highest in 2 1/2 years, The Sun reported.

Realtors say sellers should expect some buyers to try to negotiate prices and to require home inspections before settlement - things that buyers typically did before the market took off in a frenzy several years ago.

"It had gotten to a point where a seller could ask anything they wanted and get it, and some of them have not realized that that's not the case anymore," Quattlebaum said. "So properties will stay on the market a little longer, and there will be some negotiation in price."

Wright agreed.

Sellers can no longer look at previous sales in their area and "add 10 or more percent to that" when pricing their homes, he said.

It might behoove sellers to price their homes realistically, he said.

"Your first offers are your best offers," Wright said. "The longer a home sits on the market, the less likely you are to achieve your price."

Real estate agents differ on exactly when the go-go market of recent years peaked, at least until the next cycle. Some say the market peaked last summer, and others say in the fall.

Overall, 2005 was a boom year for real estate. The average and median prices at which a home sold increased about 20 percent over 2004, while the number of homes sold and the average number of days on the market dipped very slightly, according to MRIS data.

Darryl Jones, 38, a government contractor, sold a house in Glen Burnie and bought a house and lot near the Magothy River this spring.

"I had been looking to buy a lot on which to build a house for a couple years," he said.

He had made offers but was outbid. He also looked at investment properties.

"I wrote at least 20 different offers on different homes, and someone would come in and outbid me," Jones said, although he did buy rental property in the past year or two.

He was persistent and used the Internet in his home search. He snatched up a $100,000 lot and persuaded an adjacent property owner to sell him a vacant home for $325,000 this year.

He sold his Glen Burnie home for $355,000 quickly although he has seen "houses sitting a lot longer than they were six months ago."

Drawing on his experience as a buyer, he said, he fixed up his home before putting it on the market - he had three offers the first day. He used a lower-cost real estate firm called Help-U-Sell in Severna Park.

"I just happened to get lucky somehow," he said.

More buyers, especially first-time ones, could feel luckier this year. Several agents said that the substantial annual escalation in housing prices has likely ended for now.

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