No recovery

Housing sales, prices fell in October, dashing any hopes for quick rebound

November 11, 2008|By Lorraine Mirabella | Lorraine Mirabella,lorraine.mirabella@baltsun.com

Home sales and prices in the Baltimore area fell in October, and experts said rising joblessness and tighter credit markets could further dampen sales in the months ahead.

The statistics released yesterday dashed hopes that a recovery had begun in Baltimore's housing market, experts said.

Sales of previously owned homes in metropolitan Baltimore decreased nearly 15 percent last month compared with October 2007, while the average price dipped 4.8 percent to $300,546, according to Metropolitan Regional Systems Inc.

Area economists predicted the housing market's two-year struggle will continue during the coming months.

"Consumer confidence is down, and consumers are just worried about these surprises that are looming in the horizon," said Daraius Irani, director of applied economics at RESI, Towson University's consulting arm. "With credit markets a little more difficult and loan requirements more stringent, purchasing a home may be something people put off ... as they gather enough for a down payment. The overriding concern is, 'Will I have a job next month or next year?' "

The slowdown in sales last month came after the market had stabilized somewhat in September, with the number of home sales off just 2 percent compared with a year earlier. Home sales had been falling about 30 percent each month on a year-over-year basis.

"I suspect the weakening in October reflected the sharp erosion in the job market in the wake of the financial panic which began in September, and that's unlikely to change soon," said Mark Zandi, chief economist of Economy.com,

He predicted sales in the Baltimore area would remain sluggish into early next year, while prices would drop throughout most of 2009 as more foreclosed properties at steep discounts come on the market, putting additional pressure on prices.

In Baltimore City and its five surrounding counties, 1,631 homes sold last month, a decrease of 14.96 percent from October 2007, according to MRIS.

Real estate agents said they are seeing sellers beginning to offer homes at prices that are more in line with market expectations.

"Sellers are becoming more realistic," said Marybeth Brohawn, a sales agent with Coldwell Banker in Catonsville. "They're hearing more about the expectations of the market and being more realistic to start."

Sellers in October got, on average, 90 percent of their asking price, with homes staying on the market an average of 4 1/2 months.

Charles Raab, 84, who recently moved with his wife to a retirement community, has lowered the price several times on the four-bedroom Catonsville house where he raised his family. Originally listed at $524,900 more than three months ago, the house he built with his father in 1950 is now priced at $424,900.

Raab said he needs to sell the house because he and his wife can no longer maintain it. And he's willing to sell for less than a recent appraisal.

"Prices were out of this world before all this economy fell down, they were really overpriced," Raab said. "We had to be realistic. I do think what I have now is a fair price, and that's what I'd like to get."

The Catonsville house was one of more than 20,000 active listings that MRIS reported for October. That number included more than 4,000 new listings, more than double the number of homes that sold during the month.

But some agents said they're starting to see increased interest in open houses and showings of homes from more serious buyers.

"Buyers are starting to feel [lower prices] are a good thing," said Kathleen Williams, a real estate agent with Long and Foster in Towson. "It's hard for sellers to appreciate, when you think of the increases we've seen."

Meg Christian, a real estate agent with Coldwell Banker, said she was encouraged to see nine sets of potential buyers touring the Raab house on Sanford Avenue over the weekend.

"It's not unheard of to have no one," she said. "We're getting more activity."

In the region, only Harford County posted an increase in sales and price, which averaged $291,584. But fewer than 200 homes sold during the month.

Compared with October 2007, prices fell as much as 9.3 percent in Anne Arundel County, to an average $380,261, and as little as 3 percent in Baltimore, to an average $183,160.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.