April Longest had a lot of reasons to move from an apartment in Hampden to a house of her own: low interest rates, a first-time-buyer credit and a monthly payment not much higher than her rent.
But one of the biggest motivators of all for buying a semi-detached rancher in Medfield last month came from her competition - other buyers.
"As I was looking at houses in the area, I was seeing a very good selection, but it started to dwindle," said Longest, a 24-year-old insurance coordinator. "Obviously people were buying, so that pushed me."
Real estate experts say first-time buyers such as Longest are helping to break through a gridlocked housing market, offering some of the first glimmers that Baltimore's housing market may be starting to turn around.
Even in a recession and with joblessness rising, buyers are starting to venture back into the housing market in greater numbers, experts say, as prices have plummeted, making homes more affordable. The more than 1,900 homes that changed hands in May in the Baltimore metro area represented the slimmest percentage decline in sales in months, an 8.5 percent drop, according to statistics released Wednesday.
"I think that we probably are close to a bottom now in terms of sales of homes and construction activity," said Celia Chen, a senior director and housing analyst at Moody's Economy.com. "Housing is very affordable right now. Prices have fallen quite a bit in the last two years and mortgage rates are ... still low enough to keep housing affordable."
But she cautioned that housing demand is still being constrained by job losses and by difficulty in obtaining mortgage financing for those with less than stellar credit. While some economists say the housing market will likely slowly improve through the second half of this year, prices are expected to continue sliding through the beginning of next year, and job growth is not expected until the beginning of next year, Chen said.
In the city and five surrounding counties, prices fell 11.38 percent year-over-year last month, to $280,015 from $315,989 in May 2008, figures from Metropolitan Regional Information Systems Inc. showed.
Average prices, which took their steepest dive in more than a decade in April, have hovered below the $300,000 mark each month since November. Home values in May fell at least 9.25 percent in each jurisdiction except for Harford County, where prices remained flat. Sellers in May got about 90 percent of their asking prices.
The number of homes sold rose slightly in Anne Arundel County, remained flat in Carroll County, fell 4.4 percent in Baltimore County and more than 13 percent in Howard and Harford counties and dipped by 17.5 percent in Baltimore City.
For the overall region, home sales have been improving on a year-over-year basis each month since March. Sales fell 21 percent in January, 31 percent in February, 18.5 percent in March, 16 percent in April and 8.5 percent in May, MRIS statistics show. The number of pending sales, those on which contracts have been signed but have yet to settle, climbed over 2,000 for the first time since April of last year, MRIS said.
"I see a bottom, and I see a little bit of light at the end of the tunnel, driven by first-time home buyers," said Gus Tsamouras, a branch manager for Long & Foster Real Estate in Roland Park. He said sales for his office had jumped 22 percent compared with May 2008. "The last three months have been OK. This is the first time in quite a while that we have had positive numbers stringed together for multiple months."
The number of foreclosures and "short sales" on the market, which have increased as the economy has worsened, have had the effect of both depressing average prices and helping somewhat to spur sales, experts said.
Longest said the two-bedroom home she signed a contract on in Medfield had been on the market for more than a year and had been reduced over time from $218,000 to $150,000. Her offer of $145,000 was accepted.
Stephanie Yungmann, a real estate agent with Zip Realty, said business began picking up in mid-March. She said buyers appear to be more motivated than they have been in months, and it's become more common for the more aggressively priced homes to get multiple offers.
"There were even a couple of times I was saying I feel like we're in the boom again," Yungman said.
Some of those she has worked with recently were moving up to a larger home.
"They were more realistic about the price they might get for their home and thinking more about this being a balancing act - they might not get as much as they had optimally hoped for on their sell, but on the buy side they might get a reasonable deal," she said.
One of her clients, Todd Brower, said he and his wife were prepared for their three-bedroom rancher in Linthicum in Anne Arundel County to take several months to sell. Homes that sold in May took, on average, nearly 4 1/2 months to sell, according to the MRIS report.
But the Browers' home, listed at $250,000, sold in just 17 days, and they were able to take their pick of five offers.
The quick sale allowed the couple, who have two young children, to launch a search for a larger house. They signed a contract on a Colonial with a two-car garage in Severn, for a price Brower described as "fair."
"We were starting to outgrow our current home," he said. As interest rates and prices have come down, "we felt now was the best opportunity."
