Real estate data firm Clear Capital predicts that the Baltimore metro area will see a boost in home prices of nearly 5 percent during the rest of the year.
The company expects the region will have the 10th largest gain among the 50 biggest metro areas.
It bases its Baltimore-area forecast -- for a 4.7 percent increase, if you like specifics -- on the region's sharp drop in foreclosures, among other factors. That's an increase over its earlier projections.
"The current [foreclosure-sale saturation] rate of 10.9% not only represents nearly half of the distressed sale activity back at the height of the crisis, but is the lowest this market has seen in the last 4 years," Alex Villacorta, Clear Capital's director of research and analytics, said in an email. "This alleviation of downward price pressure coupled with the first consecutive quarters of price increases in 6 years are the driving components of why we see this price growth to continue through the year."
Since the start of the year, prices are up 3.4 percent in the Baltimore metro area, according to Clear Capital's estimates.
The company compares sales of the same homes over time to try to get at the true change in value. (The average or median price of everything that sold this year vs. everything that sold last year doesn't necessarily tell you how much apples-to-apples prices are going up or down, since the mix of homes always changes.)
"The Baltimore market has been an interesting one in that it's been very near (geographically) to the strong housing market of metro D.C., yet has seen persistent declines over the last 5 years," Villacorta said in his email. "As opposed to the majority of the metro markets around the country, the Baltimore market saw no reprieve from price declines ... including during the tax credit run-up of 2009/2010. Through this year, however, this market seems to be turning a corner."
Tempering the joy for underwater homeowners: Even if this area "indeed sees another 5% growth, it'll still be down 25% off of peak levels," he said.
The June home sales numbers, out Tuesday, paint a similar though not identical picture of a housing market rising off the bottom. The months of supply is back to where it was in the summer of 2006, before the crash, thanks to that sharp drop in foreclosures for sale and legions of homeowners who can't sell (other than by short sale) because they owe more than their property is worth.
That's continuing to produce tales of fights over well-priced homes in nice neighborhoods.
Cathy Werner, broker of ReMax American Dream, shared an anecdote in today's story about getting five offers on a Bel Air home last month, some of them with escalation clauses.
What I didn't have space to include in that story, but what I hope is obvious to everyone, is that this market is not a repeat of 2005 -- when escalation clauses were common. Those days, buyers offered far over asking price and skipped home inspections. Sellers never had to worry that the bank’s appraiser would judge the deal overpriced.
This market, Werner said, “is definitely not 2005.”
“We’re always cautious about the appraisals,” she said. “Sellers are pricing their houses aggressively. Buyers are coming in, for the most part, less than [asking price] and wanting more in home-inspection repairs. So getting to the settlement table takes a lot more effort.”
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