Maryland home sale prices fell at the end of the year, the first dip into negative territory since 1995, according to new government figures.
The Office of Federal Housing Enterprise Oversight said yesterday that prices in the state dropped modestly, just under 1 percent in the final three months of 2007 versus the fourth quarter of 2006. But conditions for sellers worsened as the year progressed, with prices falling 2.6 percent between the summer and fall alone.
Home prices declined in every state except Maine in the October-December quarter versus the third quarter that ended Sept. 30. Maryland's price decline was 13th largest, behind such slump-battered states as California and Nevada.
"Prices are weakening a fair bit right now, but the massive price declines we're seeing in Florida and California and Nevada and so forth haven't quite hit our area," said Andrew Leventis, senior economist at the federal agency, which oversees mortgage financiers Fannie Mae and Freddie Mac.
"I think the spring will be very telling," he added. "Last springtime, we saw a massive increase in the inventory of for-sale homes, ... and that almost certainly put significant downward pressure on prices."
That "inventory overhang," as Leventis puts it, is a problem for local sellers. More than 18,000 homes were on the market in metropolitan Baltimore in January. It would take 14 months to sell them all at the current sales pace, twice as long as a year earlier.
The Office of Federal Housing Enterprise Oversight tracks repeat transactions of the same single-family houses to avoid the skewing that happens when the types of homes sold change significantly from one period to another. For metro areas, the agency combines sales and refinance transactions. That measure showed prices in the Baltimore metro area rising about 2 percent in the last three months of 2007, compared with the final quarter of 2006.
That was the smallest increase since 1997 and ranked the metro area in the middle of the pack nationwide.
Refinancing a factor
Celia Chen, director of housing economics at Moody's Economy.com, warned that prices likely were lifted by the refinance transactions. With tighter credit standards now, only homeowners on stronger footing can refinance.
That's part of the reason Baltimore-area prices are up on this measure but down according to the National Association of Realtors.
