Housing market signs in conflict

Sales down, selling time grows, but prices still rising in region

March 14, 2007|By Jamie Smith Hopkins | Jamie Smith Hopkins,Sun reporter

The housing market continued to show both improvement and weakness in the Baltimore metro area last month, with some parts of the region recording strong price increases even as the average time to sell a home stretched past three months.

The average Baltimore-area home sold for about $315,600, up 7.3 percent from February 2006, according to Metropolitan Regional Information Systems Inc., a Rockville company that tracks properties sold through the multiple-listing service.

Prices jumped nearly 17 percent in the city and about 13 percent in Anne Arundel County, but they dropped in both Harford and Howard counties - about 3 percent and 1.6 percent, respectively. Baltimore County and Carroll prices rose less than 5 percent.

Across the region, homes sold in 93 days on average. That's up sharply from 57 days a year earlier, according to MRIS numbers.

Home sales also declined again last month, after an upturn in January - the first in 16 months. But the 4 percent drop was significantly less than the double-digit decreases last year. Carroll and Howard, meanwhile, both posted increases in homes sold last month.

Another positive sign: The number of homes on the market, which increased rapidly after the housing boom ended in the fall of 2005, has been falling. Active listings in the metro area dropped below 14,800 last month, down almost 3,000 from the peak in September.

Such conflicting signs complicate efforts to predict where the market is headed. But many real estate agents say they've seen an improvement in recent weeks.

"I think now we're just normal - it's a normal market," said Katie E. Grove, an agent with Coldwell Banker in Owings Mills and immediate past president of the Greater Baltimore Board of Realtors.

She attributes the continued fast appreciation in Baltimore to the city's lower-than-average prices - about $190,000 last month. She's also seeing a stream of buyers from the Washington area in search of less-expensive homes.

Regional sales momentum "appears to be rebounding," said economist Anirban Basu, chief executive of Baltimore-based Sage Policy Group Inc. January's increase came at a time of unseasonably warm weather, but February was snowy and cold, which he believes makes the small drop in sales look pretty good.

But inventory remains high, he warned. Until the number of homes for sale drops significantly, it's a buyer's market - and a particular headache for homebuilders, who have to compete with individual sellers for those buyers.

"Nonetheless, the situation has improved markedly in the last six months," Basu added.

In Howard, where MRIS recorded an average price drop but a nearly 10 percent increase in sales last month, "there's better equilibrium now," said Pat Hiban, associate broker of the Pat Hiban Real Estate Group at Keller Williams Select Realtors in Ellicott City.

A two-hour open house Sunday drew 14 families, the sort of activity that's more typical at the height of the spring selling market, he said. And at their weekly meeting Monday, staff members reported offers on nine properties. "In the past five months, there's been several Monday morning meetings ... where there's been offers on nobody's house - nothing," he said.

Even with more sales, buyers still have the advantage. That's a big change from the housing-boom years, when they had to make quick decisions and offer contracts with no contingencies if they didn't want to lose out. Nowadays, seller givebacks - money toward repairs or closing costs - are routine.

That means the real prices sellers get may not be increasing at the rate reported to MRIS.

Laura A. Scott, a buyer's agent in Hiban's office, said she sees prices remaining flat or declining. "They are allowing many people that have good credit but no money the opportunity to buy, which is great," she said. "A lot more opportunity for the first-time homebuyer."

Alisha Green, 23, a first-time buyer who settled on a home in Towson this week with husband Greg, is glad they waited to make the leap. Greg Green figured prices were going to drop when they began researching the market last year. That bet paid off: The single-family Dutch Colonial they just bought for $425,000 listed for $460,000 a year ago. The Greens also got a few thousand back for repairs.

"We saved quite a bit," said Alisha Green, who works for the Maryland Institute College of Art in Baltimore. "And we didn't have any bidding wars or anything like that. It was very easy."

But some buyers have found the homes they want bought out from under them - a sign of increased market strength.

Carolyn Heggie, a Realtor and broker with C.W. Heggie-Key Realty in Dundalk, tried to make offers for clients on three homes last weekend and found all had just been sold.

The Baltimore County properties ranged in price from $150,000 to about $330,000, and all had sat on the market at least four months.

"It was surprising," said Heggie, who's been in the business since 1971. "Three times in the last week."

jamie.smith.hopkins@baltsun.com

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