Even with a slowing housing market, home prices in Maryland are among the fastest rising in the nation, the Federal Deposit Insurance Corp. said yesterday.
Only four states and the District of Columbia topped Maryland's home price increase of 20.5 percent in the first three months of the year, compared with the same period last year. That pace isn't far off what Maryland saw last year, likely the peak of the boom, and was way ahead of the national gain of 12.5 percent.
Still, it seems to be a last hurrah. Sales in Maryland have been falling and unsold inventories rising sharply, the FDIC said in a quarterly report on the economic and financial health of the states.
Expect price gains to decelerate here and nationwide after the last few "abnormally strong" years, said Kathy R. Kalser, a regional manager for the FDIC's division of insurance and research.
"Home prices tend to lag sales, so first you're going to see houses being on the market longer," she said. "It may be a while before the sellers actually drop their price."
Many of the 10 states posting the biggest increases are coastal, though the No. 1 - at nearly 33 percent - was Arizona. It was followed by Florida (26.6 percent), Hawaii (25 percent), Oregon (21 percent) and the District of Columbia (20.8 percent). Idaho, Washington, California and Virginia rounded out the list behind Maryland with increases of about 18 percent to 20 percent.
The FDIC made its comparisons with data from the Office of Federal Housing Enterprise Oversight, which reports changes in median home prices but not the prices themselves.
The Maryland Association of Realtors said the median sales price in the state was nearly $300,000 in March, the end of the first quarter.
Mark Zandi, chief economist of Moody's Economy.com, said he thinks prices have risen so swiftly in Maryland that they will flatten or even decline slightly in the next few years.
"It's not going to be off to the races again anytime in the near future," he said. "The effective price is probably already flat to down. Sellers are having to put money into the homes to find a buyer, and that's not showing up in the transaction price."
Hagerstown is a perfect example of the softening market.
Prices there increased 24 percent, the biggest jump in the state, according to the FDIC's first-quarter numbers. But the Western Maryland community is no longer a seller's dream and hasn't been since last fall, said Frannie Parks, a Realtor with Advantage Realty in Hagerstown.
