Home prices up, but sales slump may linger

The real estate slump in Baltimore County could drag through 2008 and pull more house prices down with it, local market-watchers warn.

The number of houses sold across the county this June fell 17 percent below sales in June 2006, according to statistics released by Metropolitan Regional Information Systems, a Rockville firm that tracks real estate sales.

The total dollar value of homes sold dropped 14 percent below June 2006 sales while the time it took to sell a house jumped 71 percent from 42 days to 72 days, the firm reported.

The average price of houses sold in Baltimore County, however, increased 3.5 percent to $326,744.

But county real estate agents warn buyers not to hang their hopes on that thin, silver lining. Around the county, some house prices have already dropped.

Prices in northwest Baltimore County have been flat since last summer and now "prices definitely are coming down, but they're not plunging," said Nnaemeka Chima, broker with the Pikesville-based real estate company Chima Group. The average time to sell a house in the northwestern part of the county, he added, now tops three months.

Marc Witman, a former president of the Greater Baltimore Board of Realtors and a principle with Yerman Witman Gaines & Garceau Realty in Baltimore, said he sees particular weakness in Pikesville and Owings Mills, where a large inventory of houses is on the market and many of those houses are similar or nearly identical.

It's a dilemma with which Owings Mills homeowner Jonathan Redley is all too familiar.

When he put his Pleasant Walk town house in Owings Mills on the market April 1, Redley knew not to anticipate a quick sale. But he wasn't expecting to go four full months without a single offer.

"The house shows beautifully. We get great compliments after every showing and we have two to three showings every week," he said.

Redley and his wife have cut their asking price from $265,000 to $260,000, sweetened the pot with a home warranty and are now considering offering to cover some of the buyer's closing costs. But there are six other nearly identical town houses up for sale in Pleasant Walk and dozens more town houses on the market just in Owings Mills.

"So buyers can afford to be very choosy," Redley said.

Sometimes a buyer's choice, he said, is determined by such fine points as which house has the nicer bathtub.

Across the county, more than 4,200 homes were up for sale at the end of June.

Several factors have created a tougher market for house sellers. Double-digit price hikes in recent years placed many houses outside the average buyer's price range. Meanwhile, this year's wave of foreclosures has prompted some lending institutions to stop offering subprime mortgages and other unconventional loans that had enabled moderate-income buyers to purchase a house.

Those factors could force more sellers to trim their asking price, Chima and Witman said.

"This is economics 101. Sellers for the most part have not yet gotten the idea that they need to be more price-sensitive because buyers are very much more price-sensitive and value-oriented than they have been in the last few years," Witman said.

Many sellers are having difficulty realizing they can't follow a recent practice of pricing their house several thousand dollars above the most recent sale in the neighborhood, Chima said.

"It can be very humbling when you realize the boom is over and you've missed it," he said.

Chima says the region's current real estate market is a normal, stable market. Unique and top-quality houses are still selling quickly for high prices. Chima added, however, that he doesn't expect to see prices rise again until the summer of 2009.

But Redley said there is an upside to the current market.

When Redley and his wife bought their Pleasant Walk town house in the hot market of 2005, they had to jump at the opportunity and offer above asking price to beat out competing bidders.

Now the couple, who are expecting their first baby, are shopping for a single-family home. They've found three or four Owings Mills houses they like, and those properties aren't selling either. So when they're ready to make an offer, Redley said, he expects he'll be able to go back to the same homes and have the luxury of negotiating a good price. (owingsmillstimes.com)