Fall in Maryland home sales reflects trend across nation

Houses sitting longer on market.

The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘‘For Sale” signs languish in their front yards.

Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.

And the U.S. Commerce Department last week reported that new home sales in March declined by 23.5 percent from March 2006. The news mirrors a similar picture in existing home sales, also released this week by the National Association of Realtors. The group reported an 11.3 percent drop from last March.

Still, housing experts who worked through the 1980s housing slump remain optimistic.

‘‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,” said Ilene Kessler, president of the Maryland Association of Realtors.

‘‘In 2005 and 2006, there was a lot of interest in buying,” Kessler said. ‘‘It’s now a more balanced market. A lot of people have already bought.”

The market is finding equilibrium, said Frank Armantea, vice president for mortgage lending at Mid-Atlantic Federal Credit Union in Germantown.

‘‘You have to look at it as situational,” Armantea said. ‘‘There are some areas of [Montgomery County] that are quite robust. Some are drawing multiple contracts in the more moderate price ranges.”

Mortgage lender Glen Lazovick with Mid-Atlantic said there are pockets of the county with a shortage of inventory in the $500,000 range, particularly in ‘‘down county Potomac and Bethesda.”

The housing boom that ended last year was unprecedented, in that lending rates did not change much, Armantea said.

Another unusual sign was that traditional pricing trends, such as proximity to Washington, D.C., did not hold, he said. For example, in 2005 some 2,800- to 3,800-square-foot homes in Frederick were selling for the same prices as similar houses in lower Montgomery County, he said.

Last month’s slowdown in Maryland was strange, said Kenneth Wenhold, regional director of Metrostudy of Fairfax, Va., a nationwide housing market survey service.

Sales in January and February were ‘‘considerably stronger” than a year ago, he said. But the last two weeks in March were much slower than expected, possibly due to bad weather and Easter, he speculated.

By last week, though, the number of visitors to model homes and the number of signed contracts had picked up again to about 8 percent higher than the previous week, Wenhold said.

A March 31 survey by Metrostudy showed the inventory of available single-family detached homes and townhouses in Montgomery County was ‘‘very supply-constrained” at 700 units, compared with 1,026 in mid-2004, at the height of the boom. But the inventory had actually increased by more than 10 percent from Dec. 31. Meanwhile, inventory in Prince George’s and Frederick counties decreased considerably since December, Wenhold said.

Metrostudy is ‘‘really quite hopeful that the summer will increase sales as we burn through the remaining inventory and builders have more starts,” he said.

The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy.

This report originally appeared in The Business Gazette.

Falling Market

In Maryland, existing home sales in March fell 15.7 percent from a year ago, with the following decreases:

Montgomery County:16.4 percent

Frederick County:21.6 percent

Prince George’s County: 31.4 percent

Baltimore city: 8.5 percent

Source: U.S. Commerce Department
(gazette.net)