Home sales decline in the Baltimore area in March

Decrease comes after upturn in activity; prices continue to fall

April 11, 2011|By Jamie Smith Hopkins, The Baltimore Sun

Baltimore-area home sales dipped in March after several months of increased activity, falling short of the year-ago number, which spiked as the final deadline for a federal homebuyer tax credit loomed.

The number of homes sold in March throughout the Baltimore region fell about 5 percent compared with the year-earlier period, according to data released Monday by an arm of Metropolitan Regional Information Systems, the region's multiple-listing service.

Prices continued to fall, down 7 percent on average from a year ago. The average sale price for a home in the Baltimore metro area — the city and five surrounding counties — was about $241,000 in March, down from nearly $259,000 a year earlier.

"March was actually a very weak start to the spring market," said Tina Castronovo, a real estate agent with Prudential Carruthers Realtors in Baltimore. Showings were slow after a surge in February, she said.

But she said April has brought more prospective buyers into the market. "They want to see real estate for a few months rather than a couple of weeks, but they're out there, they're definitely out there," Castronovo said.

The number of contracts signed in March, with or without contingencies, did increase 3 percent over a year ago in the metro area. Those deals will turn into sales, often in a month or two, if all goes smoothly.

An $8,000 tax credit for first-time homebuyers — and, to a lesser extent, a $6,500 credit for certain repeat buyers — helped boost sales last spring. Buyers had to sign contracts by last April and close the deals over the summer, creating a temporary rush that was followed by a new slump. Sales dropped beginning in July and had only begun turning around in the metro area in December.

The incentive "didn't do anything other than make people who were already interested buy early," said Tom Harner, broker at Century 21 Associates, which has offices in Annapolis, Columbia and Waldorf.

He said he's seen an acceleration in buyer activity over the past few months that seems more sustainable than the credit-fueled buying. Appointments for home showings increased faster than he expected for the time of year in his Annapolis office in February and his Columbia office in March, he said. Contract signing is on the rise, too.

"Don't get me wrong, it's not a runaway market, but we're definitely seeing some changes," Harner said.

Home prices can't stabilize until demand is more in line with supply, so the number of buyers matters a great deal to sellers. At March's pace, it would take more than eight months to sell all 16,000 homes on the market in the metro area. And that doesn't include the "shadow inventory" of homes at the brink of foreclosure auction — more than 35,000 statewide at the end of last year — that could show up on the market at some point.

To drum up interest, some sellers get creative.

Roger Insley, who lives in the Carney area of Baltimore County, was getting about one inquiry a week on his four-bedroom Colonial until he decided to throw in a limited-time-offer freebie — his elderly parents' low-mileage 1993 Ford Taurus. Now, he said, he's getting four or five calls a day. Some are from people who just want the car, but others are interested in the house, too.

"The main thing they're having trouble with is the loan approval," said Insley, 46, who is asking $375,000 for the house, built 10 years ago. "It's been really difficult for anyone to buy a home."

jamie.smith.hopkins@baltsun.com

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