Buyers snatched up hundreds more homes last month than they did a year ago in the Baltimore metro area, a record 36 percent increase economists attributed to a mad rush to get an $8,000 federal tax credit.
In September, area home sales had risen about 10 percent over the previous year.
The tax credit, aimed at first-time buyers, was due to expire at the end of this month. Last week the program was extended and expanded, with higher income limits and a $6,500 credit for many homeowners buying again. But an extension had been no guarantee, and many local buyers were trying to get in under the wire last month. The number of new contracts signed - pending deals, not sales - was up 65 percent from a year ago, according to numbers released Tuesday by Metropolitan Regional Information Systems.
"It is the housing market version of 'Cash for Clunkers,' " said Baltimore economist Anirban Basu, referring to the government incentive program to trade in old cars for new ones. "It shows that when consumers are sufficiently stimulated, they will act on big-ticket items."
Doris Hall-Scheeler, senior vice president at Sage Title Group's White Marsh office, saw a lot of people pull out of contracts they feared would not close by Nov. 30 and then make offers on other homes, so focused were they on getting that $8,000. "There was just a huge flurry of activity to find a house they could move forward with," she said.
More buying hasn't stopped prices from falling, in part, economists say, because first-time buyers are gravitating toward foreclosures and other distress sales. Average sale prices for homes dropped about 8 percent in the metro area from a year earlier, MRIS said. Average homes sold for about $275,000.
The Baltimore area's 36 percent increase in home sales is the biggest year-over-year jump since the Rockville-based MRIS began tracking the market in the late 1990s. Even during the housing bubble, when buyers flooded the market thanks to low interest rates and too-easy lending terms, annual sales increases never reached 30 percent.
The collapse in home-buying activity that began in late 2005 was so large, however, that the number of homes changing hands last month still pales compared with the frenzied activity of the peak. Buyers closed deals on 2,219 homes last month, about 1,400 fewer than in October 2005.
