Unsold homes swell to record in region

Stacey Wooden and her husband, David Schreiber, have had their Mount Washington home on the market for four months. The couple initially listed their home for $769,000 but eventually dropped the price by almost $70,000.

Home prices flattened in July in metropolitan Baltimore, as unsold houses swelled to a record and buyers faced tightening credit from a distressed mortgage industry.

The average price of a home in the region rose less than half a percent to $331,053 last month from $329,855 in July 2006, according to Metropolitan Regional Information Systems Inc., a Rockville multiple-listing service.

Average prices rose as much as 4.2 percent in Carroll County and 3.5 percent in Baltimore City, but were down slightly in Anne Arundel, Baltimore and Harford counties and flat in Howard County.

As the number of homes on the market mounted, buyers were being forced to cut prices to make a sale happen.

At the same time, buyers - some with good credit - are finding their home loan options more limited as lenders pull back in light of problems in the subprime market.

"The pool of buyers has been shrinking," said Gail Feirstein, an agent with Coldwell Banker in the Annapolis Plaza office. "The mortgage market has created more of a gap for buyers who want to buy a house. Programs with 100 percent financing are on hold right now, and first-time homebuyers have to stretch more. That makes the whole move up market more difficult."

Earlier this week, a report by the National Association of Realtors predicted that home sales nationally likely will fall 6.8 percent to 6.04 million this year, a five-year low.

"Mortgage disruptions will hold back sales over the short term, but long-term fundamentals are favorable," with a modest upturn expected by the end of the year, predicted Lawrence Yun, a senior economist with the Realtor's association, in the report.

Prices have been falling across the nation, said Celia Chen, director of housing economics for Moody's Economy.com.

"Baltimore prices are holding up a little better," she said. "There's certainly weakness all over the country. It's getting more difficult to get financing for homes, particularly for those buyers who don't have very good credit ratings. The subprime segment has obviously collapsed, and very few lenders are now originating loans for subprime borrowers."

Subprime loans are made at higher interest rates to borrowers with poor credit.

"The fact that fewer of those mortgages are being written is behind, in large part, the declining number of sales of homes," Chen said.

Though prices barely budged from a year earlier in metropolitan Baltimore, the number of home sales has been sliding by double digits each month since April.

The number of homes sold in Baltimore and the five surrounding counties fell 12.36 percent to 2,921 in July, compared with 3,333 homes in July 2006, said MRIS, the multiple-listing service.

With listings at a record 19,985, homes took an average of 80 days to sell, compared with an average of 55 days in July 2006 when inventory was 16,749, the statistics showed.

Some price ranges are faring better than others, real estate agents said. High-end suburban houses - $3 million and up - are selling well, sometimes even within a month, said Marc Witman, a partner at Yerman Witman Gaines & Garceau Realty.

But Baltimore's downtown housing market has an abundance of homes in the $300,000 to $500,000 price range.

"There is such a supply of housing in that price range, they all start to run together," Witman said. "Buyers are becoming more deliberate and are taking their time to select the properties they want to view because there are just so many, and you don't have time to go through them all."

To compete, sellers are having to rethink asking prices and stay on top of repairs and maintenance, real estate agents said.

"Some houses have been on the market for so long that people have lost interest in keeping them up," said Tina Marine, an agent with Coldwell Banker in Annapolis. "They're grungy. The beds get stopped being made. ... People just give up."

David Schreiber and Stacey Wooden are not giving up on selling their renovated, five-bedroom, century-old house in Mount Washington. The family plans to relocate to the Chapel Hill-Durham-Raleigh, N.C., triangle for his job, which has an office in Raleigh.

They have cut their initial price of $769,000, set in April, twice to its current $699,999. The couple had hoped to move over the summer to enroll their two sons in school in North Carolina by fall. But despite several open houses, they have had just one offer.

"We're trying to be pragmatic about things," Schreiber said. "There don't seem to be a lot of variables we have control over in the housing market." (baltimoresun.com)

Maryland ranks second in U.S. for larger homes

31.1 percent in Anne Arundel County have at least 4 bedrooms.

Jeaneene Scott, a 44-year-old mortgage lender, moved her family from a Crofton townhome into a five-bedroom home at the Homeport community in Edgewater. Jeaneene Scott never thought she'd own a mansion. But this month, the 44-year-old mortgage lender moved her family from a Crofton townhouse into a five-bedroom home in Edgewater. "It's definitely a dream home," said Ms. Scott. "My son said it's the perfect hide-and-go-seek house."

Anne Arundel ranks eighth statewide, with 31.1 percent of occupied homes with at least four bedrooms, according to a recent U.S. Census Bureau report. And that's a safe sign the demand for McMansions here is still hot.

Calvert County took first place with 42.8 percent of homes equipped with four or more bedrooms. Howard County came in second with 41.9 percent and Charles County followed with 40 percent. Last place went to Baltimore city, which had 11.8 percent.

Anne Arundel's larger housing stock helped Maryland rank second in the nation, with 28 percent of its homes having at least four bedrooms. The state came in just behind Utah with 39.2 percent. Meanwhile, homes are steadily growing on a national basis, with 20 percent of occupied housing units having four or more bedrooms. That's an increase from 17.7 percent in 2000.

John Kortecamp, executive vice president of the Home Builders Association of Maryland, said he thought Anne Arundel County could rank higher if it weren't for zoning rules that limit home construction to "pretty much anything but age-restricted housing."

In Anne Arundel, Winchester Homes is building the larger homes that Ms. Scott and other home buyers are seeking. Winchester's 29-unit Homeport community off Solomons Island Road sells multi-bedroom homes starting around $1.2 million.

The county's affluent population has helped drive demand for the community and roughly 20 Homeport units sold since last summer, said Winchester President Larry Burrows.

"We have good job growth and household incomes, and we have a very educated, sophisticated customer base," he said.

Anirban Basu, chairman and chief executive officer of Sage Policy Group, an economic and policy consulting firm in Baltimore, said the proportion of large homes directly correlates to income levels. Anne Arundel ranks higher on the large-home list because of affluent communities like Severna Park and Annapolis, he said.

But younger buyers have flocked to less expensive areas, such as Odenton and Laurel because they may not have the wealth to purchase a four-bedroom home, or need to, he said.

Mr. Basu said that co-existence of residents with various income levels contributes to Anne Arundel's diverse and robust economy.

"Efficient economies are diverse economics," Mr. Basu said. "It doesn't just take the lawyer or the lobbyist to sit at lunch and have a power meal. Somebody actually has to serve the meal."

Mr. Basu said he expects home size to dwindle thanks to a growing number of empty nesters and baby boomers who want to downsize. The smaller-home trend already is taking place.

Buyers bought 197 county homes with four or more bedrooms last month, down from 273 in April 2005, according to the Metropolitan Regional Information Systems.

Charlie Buckley, a Realtor with Long & Foster who sells waterfront homes in Annapolis, said his clients are empty nesters and baby boomers looking to shed the "six-bedroom home."

These clients are saying "I just sold my big house in Potomac, my kids are grown now," he said.

Mr. Buckley said he's working to fill their needs with a builder who develops 3,000-square-foot waterfront homes that are "top quality" and "priced under $2 million."

"We always sell these houses right away," he said. "These houses have everything you would expect in a 6,000-square-foot house but they're 3,000 square feet." (www.hometownannapolis.com)