The Baltimore Sun analysis used sales data for Baltimore City and the counties of Anne Arundel, Baltimore, Carroll, Harford and Howard from Metropolitan Regional Information Systems Inc., which runs the local multiple listing service. To cut down on apples-to-oranges comparisons, the analysis does not include ZIP codes with fewer than 10 sales.
The numbers show a sharp change since the peak of buying three years ago. Sales have dropped by at least half in one out of three communities in the metro area. Average sale prices are down in one out of five communities compared with 2005.
Moody's Economy.com believes more drops are coming. Chief economist Mark Zandi - whose figures show prices declining 5 percent in the metro area since the start of 2007 - expects prices to fall 14 percent more by the time the local market bottoms out, probably at the end of next year. That's not as sharp a loss as he sees for the nation overall. But he warns that the pain will likely take months longer to play out here.
"Home sales in the area are down more than in many other parts of the country because sellers are hanging tough," Zandi said. "But ultimately I think they're going to have to give up and start cutting price."
That spells trouble for people who bought within the last few years and are trying to sell now. Already, close to 10 million U.S. homeowners - almost 20 percent of those with mortgages - owe more than their homes are worth, according to Economy.com. An increasing number of local residents are trying to do "short sales," in which their lenders let the homes go for less than the mortgage but forgive the difference in hopes of avoiding a more costly foreclosure.
"Right now, the short sales and foreclosures are a large part of our inventory," said Cathy Werner, president of the Greater Baltimore Board of Realtors and broker of ReMax American Dream.
How large is hard to say. Investment bank Barclays Capital estimated last month that 10 percent of home sales in Maryland are foreclosures, up from 1 1/2 percent a year ago. But that doesn't include people trying to sell to avoid foreclosure.
As distress sales mount, prices are further pressured, economists warn. These transactions are also far more complicated for both buyer and seller.
