Region avoids housing slump

Despite slower sales, prices are still rising in Baltimore area

May 04, 2007|By Lorraine Mirabella | Lorraine Mirabella,Sun reporter

Baltimore's cooling housing market should continue to dodge the price slumps that have hit other parts of the country, experts said yesterday.

Home values will continue to gain moderately through the end of the year despite the slowdown in sales, thanks to relatively strong employment and job growth in the region, predicted Gregory H. Leisch, chief executive officer of Washington real estate consulting firm Delta Associates.

Leisch presented his forecast at a housing outlook conference held by Metropolitan Regional Information Systems Inc., a Rockville-based real estate listing service that covers parts of Maryland, Washington, Northern Virginia, West Virginia and Pennsylvania.

The median price of a single-family home in the United States dipped 2.7 percent in 2006, compared with a year earlier, Leisch said. But it rose 4.8 percent in the Baltimore area, surpassing price gains in Chicago, New York and Los Angeles, Leisch said, even as the number of homes sold fell 13 percent.

And the average home price remained stable in the first quarter of this year.

The area, which has an unemployment rate below the national average, has been helped by its shift from a manufacturing base to an economy with growth in the medical, education and defense sectors, Leisch said.

"Baltimore was a Rust Belt city and now is one of the best-balanced regional economies," he said, with consistently high job growth and high-quality jobs, and thousands more expected in the next four years from a federal base realignment, know as BRAC, that will bring jobs to Fort Meade and Aberdeen Proving Ground.

"Is that sufficient to support a sturdy housing market? We think so," said Leisch.

The Washington metro area also fared well in the first three months of this year despite a slower pace of sales, according to the MRIS Trends in Housing Report, released in conjunction with the series of forecast conferences, including yesterday's at Martin's West in Baltimore County.

Though prices in the Baltimore region are projected to increase, values are not expected to approach the double-digit gains that persisted into the second quarter of last year.

And the average number of days homes are staying on the market has continued to rise, from 37 days in 2005 to 60 days in 2006 to 93 days in the first three months of this year.

Daraius Irani, the director of the Applied Economics Group at Towson University's Regional Economic Studies Institute and a panelist at yesterday's event, said job growth in Maryland has not been as strong as in past years.

"We are very puzzled by the fact that job growth has been anemic but unemployment is low," he said. "We view it as not enough job candidates are qualified in these high-skill fields.

The flood of new military and related jobs coming from BRAC will likely attract other companies seeking to locate near a concentration of high-tech businesses, Irani said.

Some 40,000 to 60,000 jobs overall are anticipated by 2011, creating an additional 25,000 households in Maryland and generating an estimated $500 million in income and property taxes annually, said Lisa Swoboda, a panelist and deputy director of the Office of Military and Federal Affairs in the state's Department of Business and Economic Development.

lorraine.mirabella@baltsun.com

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