Home skid slows

Sales and prices of Baltimore-area housing continued to slip in March but not as much

'phones are ringing'

April 11, 2009|By Lorraine Mirabella | Lorraine Mirabella,lorraine.mirabella@baltsun.com

Home sales and prices in metropolitan Baltimore continued to slide in March, statistics released Friday showed, though the decline was not as sharp as in recent months.

Sales in Baltimore and the five surrounding counties fell more than 18 percent last month, with 1,545 homes changing hands. Home values dipped nearly 6.5 percent compared with a year earlier, to an average sales price of $278,511, according to Rockville-based real estate listing service Metropolitan Regional Information Systems Inc.

Sales in the Baltimore area have been down on a monthly basis by more than 30 percent in eight of the past 14 months, including by 31 percent in February.

In January, average prices took the biggest year-over-year plunge in almost a decade, falling more than 10 percent.

And the total number of sales in January and February, just over 1,000 each of those months, were fewer than in any month this decade.

"The question is just whether this is a temporary improvement in an otherwise still bearish market, or whether we're starting to see signs of a bottom in the market," said Anirban Basu, an economist and chief executive officer of Baltimore's Sage Policy Group. He said he believes that "we're starting to see the beginning of the end of the housing decline."

Improvements in March are likely due to buyer activity spurred by the Obama administration's $8,000 tax credit for first-time buyers and reduced prices on homes, Basu said.

Other factors, such as recent stock market rallies that are helping to restore a bit of wealth and confidence, and lower mortgage interest rates, could bode well for a stronger-than-expected spring market, experts said.

Real estate agents said they have had more calls on properties and more requests for showings in recent weeks.

"The stats are, I think, encouraging," said David McIlvaine, president of the Greater Baltimore Board of Realtors and an associate broker at Keller Williams in Ellicott City. "But more important is the feel in the market from the agents who are out there in the trenches.

"Phones are ringing, inquiries are being made. There are buyers who want to see properties. The stimulus definitely has had an impact."

Jeff Skarda, an agent with Century 21 Horizon Realty in Parkville, agreed that the market is beginning to pick up as interest rates have fallen. Rates on 30-year, fixed mortgage loans in the Baltimore area averaged 5.53 percent this week, HSH Associates said.

"I just qualified a buyer last Friday, at 4.8 percent," Skarda said. Lower rates "will get a lot of people off the fence. That will begin to stimulate some purchasing. Homes have been on the market so long, and sellers have reduced them."

But housing's ultimate recovery will depend on an economy weakened by high unemployment and credit woes, Basu said.

"Unfortunately ... sellers remain hamstrung in their ability to sell their current homes ... and broader economic data remains decidedly negative," he said. Maryland's jobless rate rose to a nearly 17-year high of 6.7 percent in February. "This remains a time of vast uncertainty regarding market prospects."

Many buyers want to make a purchase but can't qualify for financing because of imperfect credit, said Nancy Ware, an agent with Century 21 Home Specialists.

"So many people have been either unemployed or underemployed over the past few years, which means they've been late on something," she said.

Soon Ok Winkey, a contractor, bought a four-bedroom home in Reservoir Hill in 2006 for $265,000 and spent $220,000 to restore the home, with granite countertops, hardwood floors, three fireplaces and 12-foot ceilings.

But last year, her contracting work dried up and income from a second job in car sales has declined amid the auto slowdown. Nearly five months ago, she put the Reservoir Hill house on the market, first for $475,000, now for $425,000. She plans to move to an Owings Mills house she owns and was renting out.

"I spared no expense with this house," Winkey said of the Reservoir Hill house. "This was my baby. But with the economic downturn, I've lost all my income, too. I can't keep the house. I'll be selling it at a loss."

Homes that sold in March had been on the market an average four and a half months, more than 14 percent longer compared with a year earlier. Sellers got, on average, just under 88 percent of their asking price, MRIS said.

And home sales are barely making a dent in the high inventory, leaving more than 18,000 homes on the market last month, MRIS said. In March, 4,559 new listings went on the market, while buyers signed 2,251 sales contracts.

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