If you wanted to buy a home for less than $250,000 three years ago, three-quarters of the market in the Baltimore metro area was out of your price range.
Then sellers got walloped. Housing slump. Mortgage meltdown. Recession.
Now you under-$250,000 buyers - classic first-time home purchasers - have a lot more to choose from.
Properties with asking prices in that range made up 43 percent of the metro area's housing market in May, up from 24 percent in May 2006. More under-$250,000 homes were for sale at the end of May - 8,149 - than in any previous May since 2001, according to a Baltimore Sun analysis of Metropolitan Regional Information Systems data.
"It's really opened up," said Bob Lucido, president of the Bob Lucido Team with ReMax Advantage Realty in Howard County. In some cases, "first-time buyers are able to get single-family homes as their first home because prices have come down."
Better affordability is good news not only for buyers but the housing market, which has suffered from a domino effect after Baltimore metro area prices practically doubled earlier in the decade. When first-timers can't buy, people in starter homes can't sell - which means they can't buy bigger homes, and the owners of those homes can't buy anything else either. Sales have plummeted in the metro area since the end of 2005. Thousands of homes have simply been sitting on the market.
But last month, as the price for a typical home in the metro area dropped to $250,000, sales increased. Real estate agents say they're seeing more activity because people think there are deals to be had and they're trying to take advantage of the $8,000 federal tax credit for first-time buyers.
Rising unemployment makes would-be buyers nervous, said Michael Hamby, a real estate agent with Champion Realty in Annapolis. But they're still looking.
"Right now, there's ... more first-time homebuyers out there than probably anything," Hamby said. "Hopefully that will help us clear some of the inventory."
Under $250,000 is the sweet spot for buyers and sellers, and here's why: The typical household in the Baltimore metro area earns about $71,000. Buyers getting a low-down-payment FHA mortgage can comfortably afford a $250,000 house with today's rates as long as they make at least $65,000, by themselves or as part of a couple.
