The calculation assumes a 20 percent down payment, an amount beyond the reach of many buyers in recent years as home prices escalated sharply. Buyers who put down less would spend more of their income on monthly payments.
Basu agrees that falling mortgage rates will help the local housing market. But he thinks rising foreclosures will weigh more heavily on the downside this year.
Though Maryland is in the middle of the pack for the share of borrowers behind on their payments, the number has been shooting upward in recent months, according to the Mortgage Bankers Association.
As lenders foreclose and try to resell the homes, that will add to the inventory. Already, the number of homes for sale in the Baltimore metro area is so high that it would take 10 months to find buyers for them all at December's pace of sales, according to Metropolitan Regional Information Systems data.
Both Basu and Amna Kirmani, a marketing professor at the University of Maryland's Robert H. Smith School of Business, are skeptical that a media blitz will motivate people to buy.
`A lot of suspicion'
"I think there's ... a lot of suspicion among people that it's only going to get worse, so why buy now rather than six months down the road," Kirmani said.
At yesterday's event in Timonium, news of the forthcoming ad campaign won applause. The promotion- in the form of taglines at the end of news, traffic and weather reports handled by Metro Networks - are expected to start next month and air for eight weeks.
"What we want to do is negate all the national media in terms of the doom and gloom," said Cathy Werner, president of the Greater Baltimore Board of Realtors and an agent for 22 years.
Denie Dulin, an agent with Hill & Co. in Baltimore, hopes buyers will stop waiting for that doom and gloom to show up in prices. Right now, they keep delaying a purchase because they think prices and interest rates will drop, she said.
"They're looking and looking and looking and want to see 50 or 60 homes before they make their decision," Dulin said. "That's a lot of looking."
jamie.smith.hopkins@baltsun.com
