Baltimore-area home sales in May: Conventional and short sales spike as foreclosure deals shrink

Home sales in the Baltimore area were up 13 percent in May compared with a year earlier, but that figure hides some huge variations.

Foreclosure sales dropped about 50 percent, simply because far fewer bank-owned homes are on the market right now.

Short sales, by contrast, zoomed up about 60 percent. That isn't nearly enough to account for the drop in foreclosures, but it was sufficient to make short sales more numerous than foreclosure sales for the first time since Metropolitan Regional Information Systems began tracking distress deals three years ago.

Conventional sales, meanwhile -- the ones with no bank involved except as a lender -- rose 28 percent. That's the biggest increase since May 2010, when the looming deadline for the $8,000 first-time homebuyer tax credit gave purchasers a reason to avoid more complicated deals that might have taken a long time to close.

The May home sales story gets into the million-dollar question for buyers and sellers: When will the "shadow inventory" of homes with seriously delinquent mortgages hit the market? Celia Chen with Moody's Analytics shares her forecast in the story. (The short answer: fairly soon. But she doesn't expect a huge drop in prices as a result.)

Oh, and you know the rule of thumb that a six months' supply of homes is a balanced market, with the advantage shifting to sellers as the number drops? It fell to 5.4 months in May, the lowest it's been in five years.

So you can see why sellers might be rooting for the shadow inventory to quietly go away while buyers might be eager for it to show up as short sales or foreclosures.

Here are Baltimore-area price trends by home type in May, courtesy of RealEstate Business Intelligence, MRIS's data arm:

Average sale price for bank-owned homes: $132,700, essentially flat year-over-year

For short sales: $199,900, down 15 percent

For conventional sales: $305,800, up 3 percent

That's for the metro area as a whole: Anne Arundel, Baltimore County, Baltimore City, Carroll, Harford and Howard.

And here's what the average buyer paid for a single-family house in May, by number of bedrooms:

Two or less: $163,700, down 4 percent

Three: $258,000, up 9 percent

Four or more: $428,200, up 3 percent

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