Baltimore-area housing sales fell last month to the lowest level for a September in at least nine years, as the turmoil in the mortgage industry hit the slumping market full force.
The number of homes sold - 1,975 - dropped nearly 30 percent from a year earlier, already well into the downturn, Metropolitan Regional Information Systems Inc. reported yesterday. It is the lowest sales figure for September since MRIS began tracking the area in 1998.
By comparison, buyers snapped up more than 4,000 homes in September 2005, the last hurrah of the housing boom.
Average home prices still eked out a gain last month, according to MRIS, which runs the local multiple-listing service. Prices in the metro area rose just under 2 percent, to about $315,000, with most jurisdictions seeing slight gains.
It took homes an average of 95 days to sell, a month longer than a year earlier. And the inventory of unsold homes, nearly 21,000, set a record.
Lender bankruptcies, a credit crunch and a jump in interest rates for jumbo mortgages in August continue to depress sales nationwide. Yesterday, the National Association of Realtors lowered its forecast of 2007 U.S. existing-home sales for the eighth month in a row. It now expects that the number of homes changing hands will be off about 11 percent from last year.
"I think the buyers are scared - they're afraid that if they buy today, that tomorrow [the price] is going to drop 15 percent," said George Brookhart, an agent with Long & Foster in Ellicott City.
Moody's Economy.com predicts that the local and national markets will not hit bottom until late next year, and its forecasts show values falling about 15 percent in the Baltimore area over those months. There are signs of backtracking now: Average prices dropped about 4 percent in Harford and Howard counties last month, the MRIS data showed.
Prices rose about 4 percent in Baltimore County, 3.6 percent in Anne Arundel, 2 percent in Carroll and half a percent in the city.
Economy.com says prices in the region would be down overall if they included the value of incentives that sellers now routinely give to buyers, such as thousands of dollars in closing-cost help.
High-priced Howard County was hardest hit last month, with the number of sales dropping by 34 percent. The average home there sold for about $418,000 - the point at which buyers would need a jumbo loan if they were financing the entire purchase. Harford, with an average price of $285,000, saw the smallest decline, but sales were down 22 percent.
Jada Krall, who is trying to sell a two-year-old colonial in Harford for $444,400, said she sees homes for sale everywhere she goes in the county. She counts 15 in her subdivision alone. To make hers stand out, she's offering a $7,500 incentive to be used toward closing costs or upgrade work.
"We've seen a few houses in the neighborhood sell," said Krall, whose family is relocating to Tampa, Fla. "We're just hoping ours is going to be next."
She can expect good deals in Florida, at least. Economy.com expects price declines of 20 percent to 30 percent in some of the once-hot housing markets there.
Celia Chen, director of housing economics at Economy.com, said recent tightening of credit is holding back demand nationally even as foreclosures increase supply. Borrowers with good credit can still get traditional mortgages, she said, but 40 percent of the loans issued last year were "subprime" and "nonprime" - from jumbo to interest-only.
"The lack of that kind of funding is going to have a big negative impact on housing this year," Chen said.
To avoid the higher rates of jumbo loans, city residents Bonita and Radames Rodriguez are opting for a regular mortgage plus an equity line of credit to purchase a $615,000 new home in Canton.
"I don't like the idea of having two separate loans, but it's better, much better, than the alternative," said Bonita Rodriguez.
The couple, who work in sales, will settle on that house this month and also complete the sale of the Bolton Hill rowhouse they've owned for eight years. They're selling it for $575,000, $74,000 less than the original asking price in April.
But they're buying their new home for $135,000 less than the builder's original price.
Bonita Rodriguez believes it was priced way too high to begin with. "I think we got a good deal, but I don't think we got a real bargain," she said.
Real estate agents say the days of setting prices based on past sales are over. Now, said Ron Howard with ReMax Sails in Baltimore, it's about the competition - other homes on the market.
After one of his Canton rehabs sat on the market for six months, Mel Stachura of Urban Rehab Consultants LLC decided to deal with the competition by adding a bathroom and more closet space.
"You have to adapt to survive," said Stachura, who was reacting to feedback from prospective buyers who looked and left. More than 60 came through. "There's buyers out there - they're just picky."
They're much more demanding from start to finish than they used to be, said Tressa Manna, his agent.
"Buyers are asking for everything on the home inspection, to the point of, 'I want the burnt-out bulb in the hallway replaced,'" said Manna, with ReMax Sails.(By Jamie Smith Hopkins, Baltimore Sun )
Showing posts with label home sales. Show all posts
Showing posts with label home sales. Show all posts
Tuesday, October 16, 2007
Tuesday, August 21, 2007
Home sales slump in Md.
21.1% fewer sold in spring; prices in area hold up
Maryland's housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation.
Homeowners in the state sold 21.1 percent fewer homes during the second quarter than they did a year earlier, the National Association of Realtors said yesterday. That was nearly double the 10.8 percent drop for the nation as a whole. The numbers, which track existing homes, are annualized and adjusted for seasonal variations.
Despite the steep sales decline, pricing in the Baltimore metropolitan area held up. The median price of a single-family home gained 3 percent in the April-June quarter over the same three months a year earlier, according to the association. Nationally, prices fell 1.5 percent.
The slump in sales in the April-June period preceded the current turmoil in the mortgage industry, which was ignited by failures in subprime loans made to buyers with shakier credit. Now, as foreclosures mount and more lenders go out of business, it has become harder to qualify for a mortgage, narrowing the pool of potential buyers.
That's a sharp contrast to what happened during the housing boom, when relaxed lending standards and the proliferation of adjustable-rate, interest-only and other nontraditional loans led to rising sales and prices.
"All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle," said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. "Well, it popped."
Lawrence Yun, senior economist with the National Association of Realtors, thinks prices in the Baltimore area are holding up because the economy continues to create high-paying jobs.
"There's not a panic in the market," agreed John McClain, senior fellow at the Center for Regional Analysis at George Mason University. "There are still people out there who need to live here because we still have job growth."
But sales might be better if prices were dropping.
Maryland home prices doubled from 2000 to 2005, an unusually big gain even for the U.S. boom years. Incomes didn't rise nearly as fast. With half the homes now selling for more than $325,000, some would-be buyers just can't make the numbers work.
"Affordability has been eroded," said Celia Chen, director of housing economics for Moody's Economy.com. "If prices are not falling off, that's going to constrain sales."
She thinks the local housing market probably won't improve until the middle of next year, and that's assuming no more nasty surprises.
"Conditions can easily become much worse than we expect because of all the issues arising right now in the mortgage markets and financial markets," Chen said.
Only Florida, Nevada, Arizona and Tennessee saw bigger decreases in second-quarter sales than Maryland. Florida - a state that, like Maryland, recorded some of the biggest price increases in the country during the housing boom - had a 41 percent slump in sales.
In all, 41 states plus the District of Columbia recorded declines.
Maryland's annualized sales pace in the second quarter was just under 93,000 home sales, compared with about 118,000 the same time last year, the National Association of Realtors said.
Existing homes aren't the only part of the market feeling the pinch. The National Association of Home Builders said yesterday that its index of builder confidence for August fell to its lowest level since the recessionary days of January 1991. Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need "jumbo" loans of more than $417,000.
It's hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.
"That's a scary thought," said Pat Hiban, an associate broker at the Pat Hiban Real Estate Group with Keller Williams Realty in Ellicott City. With interest rates on jumbo loans rising, some would-be buyers are reconsidering whether to purchase a home, he said.
Yun said mortgage troubles will hold back demand during the short term. But he said the subprime bust has propelled buyers with less-than-perfect credit back to loans insured by the Federal Housing Administration, a segment of the financing market that was all but abandoned during the go-go days of the boom.
He expects small gains in prices in the Baltimore area in the near future.
Yun noted signs of nationwide improvement in prices during the second quarter with 97 metropolitan areas out of 149 showing year-over-year gains in price, up from 83 in the first quarter and 68 in the fourth quarter of last year.
But Chen thinks some of the second-quarter increases were artificially high. Median prices might have been skewed upward by a drop-off in sales of cheaper homes, she said, because the subprime market was in trouble before interest rates rose for jumbo loans.
"The lower end of the housing market is falling off quickly, more quickly, because of all the problems of the subprime lending market," Chen said.(baltimoresun.com)
Maryland's housing market took a beating in the spring selling season, recording one of the biggest drops in sales in the nation.
Homeowners in the state sold 21.1 percent fewer homes during the second quarter than they did a year earlier, the National Association of Realtors said yesterday. That was nearly double the 10.8 percent drop for the nation as a whole. The numbers, which track existing homes, are annualized and adjusted for seasonal variations.
Despite the steep sales decline, pricing in the Baltimore metropolitan area held up. The median price of a single-family home gained 3 percent in the April-June quarter over the same three months a year earlier, according to the association. Nationally, prices fell 1.5 percent.
The slump in sales in the April-June period preceded the current turmoil in the mortgage industry, which was ignited by failures in subprime loans made to buyers with shakier credit. Now, as foreclosures mount and more lenders go out of business, it has become harder to qualify for a mortgage, narrowing the pool of potential buyers.
That's a sharp contrast to what happened during the housing boom, when relaxed lending standards and the proliferation of adjustable-rate, interest-only and other nontraditional loans led to rising sales and prices.
"All of us were on a nice bubble, and everybody was waiting for that bubble to fizzle," said Thomas C. Shaner, executive director of the Maryland Association of Mortgage Brokers. "Well, it popped."
Lawrence Yun, senior economist with the National Association of Realtors, thinks prices in the Baltimore area are holding up because the economy continues to create high-paying jobs.
"There's not a panic in the market," agreed John McClain, senior fellow at the Center for Regional Analysis at George Mason University. "There are still people out there who need to live here because we still have job growth."
But sales might be better if prices were dropping.
Maryland home prices doubled from 2000 to 2005, an unusually big gain even for the U.S. boom years. Incomes didn't rise nearly as fast. With half the homes now selling for more than $325,000, some would-be buyers just can't make the numbers work.
"Affordability has been eroded," said Celia Chen, director of housing economics for Moody's Economy.com. "If prices are not falling off, that's going to constrain sales."
She thinks the local housing market probably won't improve until the middle of next year, and that's assuming no more nasty surprises.
"Conditions can easily become much worse than we expect because of all the issues arising right now in the mortgage markets and financial markets," Chen said.
Only Florida, Nevada, Arizona and Tennessee saw bigger decreases in second-quarter sales than Maryland. Florida - a state that, like Maryland, recorded some of the biggest price increases in the country during the housing boom - had a 41 percent slump in sales.
In all, 41 states plus the District of Columbia recorded declines.
Maryland's annualized sales pace in the second quarter was just under 93,000 home sales, compared with about 118,000 the same time last year, the National Association of Realtors said.
Existing homes aren't the only part of the market feeling the pinch. The National Association of Home Builders said yesterday that its index of builder confidence for August fell to its lowest level since the recessionary days of January 1991. Builders say the credit crunch is causing problems not only for borrowers with shaky credit but also for prospective buyers who need "jumbo" loans of more than $417,000.
It's hardly helpful for expensive markets such as Howard County. Nearly half the existing homes in Howard are selling for more than that price, let alone the big new homes.
"That's a scary thought," said Pat Hiban, an associate broker at the Pat Hiban Real Estate Group with Keller Williams Realty in Ellicott City. With interest rates on jumbo loans rising, some would-be buyers are reconsidering whether to purchase a home, he said.
Yun said mortgage troubles will hold back demand during the short term. But he said the subprime bust has propelled buyers with less-than-perfect credit back to loans insured by the Federal Housing Administration, a segment of the financing market that was all but abandoned during the go-go days of the boom.
He expects small gains in prices in the Baltimore area in the near future.
Yun noted signs of nationwide improvement in prices during the second quarter with 97 metropolitan areas out of 149 showing year-over-year gains in price, up from 83 in the first quarter and 68 in the fourth quarter of last year.
But Chen thinks some of the second-quarter increases were artificially high. Median prices might have been skewed upward by a drop-off in sales of cheaper homes, she said, because the subprime market was in trouble before interest rates rose for jumbo loans.
"The lower end of the housing market is falling off quickly, more quickly, because of all the problems of the subprime lending market," Chen said.(baltimoresun.com)
Wednesday, August 15, 2007
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)
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)
Tuesday, August 14, 2007
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)
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)
Thursday, August 9, 2007
Slowdown Offers a Chance to Get Real About Home Sizes
Will the deflating housing market motivate U.S. home buyers to deflate their housing aspirations, to get real not only about what they can afford but also about how much space they need?
Maybe buyers will realize that good design and quality construction ultimately will prove more worthwhile than square footage.
For years, the building industry has produced bigger and bigger homes. Consumer expectations, easy credit and greater profit potential have resulted in new houses with more rooms, larger garages, increased volume and, of course, higher price tags.
Consumers, after all, seek to consume. Why settle for three bedrooms, two baths and a one-car garage? Why not opt for a kitchen big enough to entertain several guests and roast two turkeys at once? Why wouldn't someone want a house with a separate room for every function? How can anyone live without a dedicated audio-video entertainment space, multiple walk-in closets and a master bathroom larger than the rarely used dining room?
Today's housing-market paradox is that while houses have been expanding, households have been shrinking. In suburban houses built during recent decades, fewer people occupy more space.
This trend's lack of sustainability seems to finally be apparent.
Some homes also lack quality and durability. Production houses with more than ample square footage are sometimes cheaply built, have awkward floor plans, suffer from overly complex three-dimensional geometry, and boast too many materials and motifs. How many overlapping gables, neoclassical cornices, false dormers and useless shutters does a house need?
Such homes are not dysfunctional or unsafe. But the construction products may be the least costly; may feel and look inexpensive; and may require maintenance, repair or replacement more frequently.
There are lots of opportunities to compromise quality in designing and building a house. Windows and doors are favorite cost-saving targets. Interior finishes and accessories -- decorative trim and hardware, cabinets, floors, lights -- are also fruitful targets.
Among the most important components of any building, windows provide daylight and views to the outside, keep out the weather, and resist heat gain and loss. Yet the quality, cost and performance range of windows is vast.
For example, windows may be double-glazed but lack energy-efficient, low-emissivity glass and an insulating cavity filled with inert gas. The window frame and sash may be thin vinyl that is easily deformed, rather than aluminum or aluminum-clad wood. The movable sash may not move very smoothly.
If interior doors are not solid-core with robust hardware and a well-aligned frame, they can feel flimsy, shut or latch poorly, and do little to stop noise or fire.
Fortunately, the structural framing, water and waste piping, and electrical systems of new homes usually perform reasonably well, thanks to stringent building codes. Sheet-metal ductwork and mechanical equipment to heat and cool newly built homes also may be fairly reliable, assuming they have been properly engineered and installed.
Today, with dramatic increases in mortgage foreclosures, tightening loan standards, and ever-rising costs of land and construction, many home buyers and home builders will have to alter their behavior.
Attitudes about homes need to shift away from quantity and toward quality. Downsizing should be the new upscaling.
Buyers should demand well-built and long-lasting but modestly sized houses -- 2,000, 2,500 or 3,000 square feet -- instead of ostentatious but cheaply built 5,000- or 6,000-square-foot houses.
Smaller homes will be more affordable, more durable and, not incidentally, a lot easier to keep clean. With good design, they also will be more attractive. (Washington Post)
Maybe buyers will realize that good design and quality construction ultimately will prove more worthwhile than square footage.
For years, the building industry has produced bigger and bigger homes. Consumer expectations, easy credit and greater profit potential have resulted in new houses with more rooms, larger garages, increased volume and, of course, higher price tags.
Consumers, after all, seek to consume. Why settle for three bedrooms, two baths and a one-car garage? Why not opt for a kitchen big enough to entertain several guests and roast two turkeys at once? Why wouldn't someone want a house with a separate room for every function? How can anyone live without a dedicated audio-video entertainment space, multiple walk-in closets and a master bathroom larger than the rarely used dining room?
Today's housing-market paradox is that while houses have been expanding, households have been shrinking. In suburban houses built during recent decades, fewer people occupy more space.
This trend's lack of sustainability seems to finally be apparent.
Some homes also lack quality and durability. Production houses with more than ample square footage are sometimes cheaply built, have awkward floor plans, suffer from overly complex three-dimensional geometry, and boast too many materials and motifs. How many overlapping gables, neoclassical cornices, false dormers and useless shutters does a house need?
Such homes are not dysfunctional or unsafe. But the construction products may be the least costly; may feel and look inexpensive; and may require maintenance, repair or replacement more frequently.
There are lots of opportunities to compromise quality in designing and building a house. Windows and doors are favorite cost-saving targets. Interior finishes and accessories -- decorative trim and hardware, cabinets, floors, lights -- are also fruitful targets.
Among the most important components of any building, windows provide daylight and views to the outside, keep out the weather, and resist heat gain and loss. Yet the quality, cost and performance range of windows is vast.
For example, windows may be double-glazed but lack energy-efficient, low-emissivity glass and an insulating cavity filled with inert gas. The window frame and sash may be thin vinyl that is easily deformed, rather than aluminum or aluminum-clad wood. The movable sash may not move very smoothly.
If interior doors are not solid-core with robust hardware and a well-aligned frame, they can feel flimsy, shut or latch poorly, and do little to stop noise or fire.
Fortunately, the structural framing, water and waste piping, and electrical systems of new homes usually perform reasonably well, thanks to stringent building codes. Sheet-metal ductwork and mechanical equipment to heat and cool newly built homes also may be fairly reliable, assuming they have been properly engineered and installed.
Today, with dramatic increases in mortgage foreclosures, tightening loan standards, and ever-rising costs of land and construction, many home buyers and home builders will have to alter their behavior.
Attitudes about homes need to shift away from quantity and toward quality. Downsizing should be the new upscaling.
Buyers should demand well-built and long-lasting but modestly sized houses -- 2,000, 2,500 or 3,000 square feet -- instead of ostentatious but cheaply built 5,000- or 6,000-square-foot houses.
Smaller homes will be more affordable, more durable and, not incidentally, a lot easier to keep clean. With good design, they also will be more attractive. (Washington Post)
Monday, July 16, 2007
For sale by lender
Foreclosed properties make up 10%-15% of local property listings
Thanks to a sharp rise in foreclosures, homebuyers are increasingly likely to encounter bank-owned properties in the housing market - listed for sale, offered at auction or even touted as a "good deal" on lenders' Web sites. But getting a bargain on a foreclosed home is hardly a sure bet.
Amid a housing slump that has pushed home listings to record numbers, lenders, too, are competing to sell homes, often through the multiple-listing service. Borrowers, in many cases, have been hurt in the slowdown by a loss of equity that could have helped them avoid foreclosure.
The increase in bank-owned properties comes as more homeowners, many in the suburbs, find themselves unable to keep up with payments on loans made during the housing boom, a time when low mortgage rates, relaxed lending standards and fast-rising home prices fueled a frenzied market.
Though it's difficult to track how many foreclosed properties are listed for sale, agents who sell homes for lenders estimate they represent 10 percent to 15 percent of active listings in the Baltimore area.
In June, nearly 20,000 homes were on the market in Baltimore and the five surrounding counties, according to statistics from Metropolitan Regional Information Systems Inc.
The number of lender-owned properties is expected to grow as billions of dollars in mortgages reset in coming months, triggering higher payments for homeowners.
Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006, and the number of borrowers at least 60 days behind on payments rose 20 percent, according to the most recent report by the Mortgage Bankers Association.
While Maryland is faring better than the nation as a whole, that still means about 5,700 Maryland homeowners were in danger of losing their homes in the first quarter.
Rising foreclosures could squeeze home values even more and prolong the slump, economists say.
"Eventually, foreclosures will be returned to the marketplace," said Celia Chen, director of housing economics for Moody's Economy.com. "Lenders have to take them back and sell them and try to sell them as fast as they can. ... It will keep price appreciation weak."
Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu, chief executive officer of Sage Policy Group Inc. of Baltimore.
"Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity," Basu said. "I don't think we've begun to see that impact in a major way."
Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.
Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.
"With more inventory, it's a buyer's market now," Marshall said. "People aren't going to offer what the house is listed for. ... It's more challenging for agents, and you have to think about different ways to get your properties out there and get them sold."
Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity - or even negative equity - has grown, particularly in cases of pricier homes with more recent mortgages.
"Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties," or buyers other than the lender," said Donald Miller, national sales director for Express Auctions, of Baltimore. Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.
"As a general rule, the newer loans have less equity, so there's going to be a higher percentage of buy-ins" by the bank, said Daniel M. Billig, a partner in A.J. Billig and Co., the Baltimore auction house.
Lenders' bigger stakes mean they aren't likely to discount properties they buy back and subsequently list, agents said. And lenders can invest thousands more to repair properties.
As a result, like other sellers, they're looking to get top dollar, said David McIlvaine, an associate broker with Keller Williams in Ellicott City who sells foreclosure properties for lenders.
McIlvaine said when he began listing homes for lenders eight years ago, most of the homes were lower-end properties, typically city rowhouses.
"That's not the case anymore," McIlvaine said. "We're seeing a more representative group of inventory crossing all lines."
That's because borrowers who stretched to qualify for more flexible loans - including adjustable rates, no down payments and interest-only payments - have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts said.
"You're seeing nicer homes, higher-priced homes," agreed Jeff Rogers, an associate broker with Coldwell Banker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. "You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages."
Miller, at Express Auctions, one of a handful of auction houses that handles the majority of foreclosure auction sales in the state, said investors continue to buy most auctioned properties that aren't bought back by lenders.
But individual homebuyers are starting to get into the mix, as investor Ed Kowalski has noticed.
"On a few occasions I have been outbid by owner-occupants," said Kowalski, who buys, renovates and resells homes in Baltimore and Baltimore County. "Generally, they'll pay more than I'll pay as an investment."
One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.
The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.
Buying at foreclosure auction is not without hurdles.
Successful bidders often must pay a cash deposit, typically 10 percent of the outstanding loan amount. The new owner must pay off any liens or second mortgages. And properties are sold as is. And an owner or tenant living in the house may or may not be cooperative about moving out.
Sihin Shiferaw, an investor who buys and rehabs homes in Baltimore City and Howard County, mostly at auction, recently took a chance on a bank-owned home listed for sale. After signing a sales contract, she discovered water in the home's basement and backed out of the deal, losing a $2,000 deposit.
Evelyn Ray, a real estate agent with Long and Foster in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.
"Now, people just cannot afford the houses that are out there," said Ray. "I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell."
Cathy Holmes, a single mother of three who works as a biological lab technician at Aberdeen Proving Ground, hopes to find a deal on a foreclosed home as a last resort to finally be able to move from a rental apartment in Whiteford. Ray, her agent, has taken her to see several homes. But so far she hasn't been able to come up with the deposit that would qualify her to bid.
"I've been renting the same apartment for 11 years, it's just impossible to get out," said Holmes, who is looking for a single-family house with some land. "I just want to have a house where I don't have to hear the neighbors' telephones ringing and their conversations. I look and I look and I look. I just can't find anything that I can afford." (baltimoresun.com)
Thanks to a sharp rise in foreclosures, homebuyers are increasingly likely to encounter bank-owned properties in the housing market - listed for sale, offered at auction or even touted as a "good deal" on lenders' Web sites. But getting a bargain on a foreclosed home is hardly a sure bet.
Amid a housing slump that has pushed home listings to record numbers, lenders, too, are competing to sell homes, often through the multiple-listing service. Borrowers, in many cases, have been hurt in the slowdown by a loss of equity that could have helped them avoid foreclosure.
The increase in bank-owned properties comes as more homeowners, many in the suburbs, find themselves unable to keep up with payments on loans made during the housing boom, a time when low mortgage rates, relaxed lending standards and fast-rising home prices fueled a frenzied market.
Though it's difficult to track how many foreclosed properties are listed for sale, agents who sell homes for lenders estimate they represent 10 percent to 15 percent of active listings in the Baltimore area.
In June, nearly 20,000 homes were on the market in Baltimore and the five surrounding counties, according to statistics from Metropolitan Regional Information Systems Inc.
The number of lender-owned properties is expected to grow as billions of dollars in mortgages reset in coming months, triggering higher payments for homeowners.
Loans in the foreclosure process in Maryland soared nearly 30 percent in the first quarter compared with the first three months of 2006, and the number of borrowers at least 60 days behind on payments rose 20 percent, according to the most recent report by the Mortgage Bankers Association.
While Maryland is faring better than the nation as a whole, that still means about 5,700 Maryland homeowners were in danger of losing their homes in the first quarter.
Rising foreclosures could squeeze home values even more and prolong the slump, economists say.
"Eventually, foreclosures will be returned to the marketplace," said Celia Chen, director of housing economics for Moody's Economy.com. "Lenders have to take them back and sell them and try to sell them as fast as they can. ... It will keep price appreciation weak."
Local home listings, already at a record high, will climb even more, partly because of mounting foreclosures, said economist Anirban Basu, chief executive officer of Sage Policy Group Inc. of Baltimore.
"Inventory has been rising sharply, and it will continue to rise, with the impact of ARMs [adjustable-rate mortgages] resetting and foreclosure activity," Basu said. "I don't think we've begun to see that impact in a major way."
Real estate agents and brokers, too, worry that putting more inventory into an already sluggish market will bring down prices and cause houses to sit longer.
Jennifer Marshall, an agent with Maryland REO real estate brokerage, said she is seeing the number of foreclosure properties soaring in suburban areas.
"With more inventory, it's a buyer's market now," Marshall said. "People aren't going to offer what the house is listed for. ... It's more challenging for agents, and you have to think about different ways to get your properties out there and get them sold."
Banks are increasingly buying foreclosed properties back at auction as other bids fall short of the amount owed. That scenario has become more common as the number of owners with little or no equity - or even negative equity - has grown, particularly in cases of pricier homes with more recent mortgages.
"Because we're seeing more expensive homes, higher-end homes going to foreclosure, logic indicates that less of those are being sold to third parties," or buyers other than the lender," said Donald Miller, national sales director for Express Auctions, of Baltimore. Miller said about 30 percent of the homes sold through his company's foreclosure auctions go back to the lenders, but banks tend to buy back an even greater percentage at foreclosure auctions in general.
"As a general rule, the newer loans have less equity, so there's going to be a higher percentage of buy-ins" by the bank, said Daniel M. Billig, a partner in A.J. Billig and Co., the Baltimore auction house.
Lenders' bigger stakes mean they aren't likely to discount properties they buy back and subsequently list, agents said. And lenders can invest thousands more to repair properties.
As a result, like other sellers, they're looking to get top dollar, said David McIlvaine, an associate broker with Keller Williams in Ellicott City who sells foreclosure properties for lenders.
McIlvaine said when he began listing homes for lenders eight years ago, most of the homes were lower-end properties, typically city rowhouses.
"That's not the case anymore," McIlvaine said. "We're seeing a more representative group of inventory crossing all lines."
That's because borrowers who stretched to qualify for more flexible loans - including adjustable rates, no down payments and interest-only payments - have been added to the categories of borrowers who had lost their homes to foreclosure due to job loss, illness or divorce, experts said.
"You're seeing nicer homes, higher-priced homes," agreed Jeff Rogers, an associate broker with Coldwell Banker who lists homes for lenders, who said some of the borrowers have owned their homes for two years or less. "You sort of saw that coming. [Borrowers] were being set up for failure with some of these mortgages."
Miller, at Express Auctions, one of a handful of auction houses that handles the majority of foreclosure auction sales in the state, said investors continue to buy most auctioned properties that aren't bought back by lenders.
But individual homebuyers are starting to get into the mix, as investor Ed Kowalski has noticed.
"On a few occasions I have been outbid by owner-occupants," said Kowalski, who buys, renovates and resells homes in Baltimore and Baltimore County. "Generally, they'll pay more than I'll pay as an investment."
One homebuyer who came to an Express Auction in May beat out an investor on a three-year-old house in Hampstead, with a winning bid of $567,500. Before the auction, the owners had listed it for sale at $1 million, Miller said.
The buyer of the property got a sprawling five-bedroom house with a master bedroom, sitting room with coffee bar, workout room, library and a three-car garage, in a neighborhood where houses have sold for more than $700,000.
Buying at foreclosure auction is not without hurdles.
Successful bidders often must pay a cash deposit, typically 10 percent of the outstanding loan amount. The new owner must pay off any liens or second mortgages. And properties are sold as is. And an owner or tenant living in the house may or may not be cooperative about moving out.
Sihin Shiferaw, an investor who buys and rehabs homes in Baltimore City and Howard County, mostly at auction, recently took a chance on a bank-owned home listed for sale. After signing a sales contract, she discovered water in the home's basement and backed out of the deal, losing a $2,000 deposit.
Evelyn Ray, a real estate agent with Long and Foster in Bel Air, is hoping the increase in foreclosures might help some of her clients who are struggling to buy a house in the aftermath of a soaring market. Ray said she has begun looking for foreclosure properties to show her clients.
"Now, people just cannot afford the houses that are out there," said Ray. "I have about 30 buyers who are just waiting. They either can't afford the houses they want or are just scared or waiting for prices to come down, or they can't sell."
Cathy Holmes, a single mother of three who works as a biological lab technician at Aberdeen Proving Ground, hopes to find a deal on a foreclosed home as a last resort to finally be able to move from a rental apartment in Whiteford. Ray, her agent, has taken her to see several homes. But so far she hasn't been able to come up with the deposit that would qualify her to bid.
"I've been renting the same apartment for 11 years, it's just impossible to get out," said Holmes, who is looking for a single-family house with some land. "I just want to have a house where I don't have to hear the neighbors' telephones ringing and their conversations. I look and I look and I look. I just can't find anything that I can afford." (baltimoresun.com)
Thursday, June 7, 2007
Baltimore: 4-year low in home sales
Values in Baltimore rise, but pace slows.
Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.
The National Association of Realtors reported that sales of existing homes dropped by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.
The median price of a home fell to $220,900, an 0.8 percent decline from the median price a year ago. The median is the point at which half the homes are sold for more and half for less.
In the Baltimore region, house values have continued to increase every month, though not at the double-digit rates registered during the height of the boom. The median price last month rose 2.61 percent to $275,000, according to Metropolitan Regional Information Systems.
But, as in the rest of the nation, Baltimore area home sales have been slumping for more than a year.
Last month, sales of homes sold through the multiple listing service sagged 11.23 percent from a year earlier. That was the fewest sold during any April since 2000, according to data from MRIS. Sales in Baltimore and the five surrounding counties have declined in 18 of the past 19 months.
The slide in existing home sales came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.
Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.
"The market is lousy," said David Sloan, senior economist with 4Cast, a market research firm in New York. "The overall economy is not growing particularly strong. The Fed is keeping interest rates reasonably high because it's worried about inflation. So I don't think much is going to change in the fundamentals of the housing market."
The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply. Analysts predicted that this big inventory surge would act to further depress prices.
"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.
"Unrealistic sellers, stuck flippers, stretched borrowers, foreclosures. They're all contributing to a surge in homes on the market," he said. Flippers are investors who bought homes during the boom hoping to resell them for a quick profit only to be caught as the market softened.
Patrick Newport, an economist with Global Insight, said that the inventory bulge was "worrisome, since builders are less likely to start new homes as long as inventories are climbing."
A recovery in housing is being held back by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten lending standards for borrowers with poor or limited credit histories.
Curbs on subprime lending "are expected to be a source of some restraint on home purchases and residential investment in coming quarters," Fed Chairman Ben S. Bernanke said May 17. Even so, Bernanke said he doesn't foresee "significant spillovers" from the subprime market to the rest of the economy.
Housing enjoyed an extended surge in which sales of both new and existing homes set records for five straight years until 2006. The Realtors are forecasting that existing home prices could decline by around 2 percent this year, which would be the first setback for an entire year on records that go back four decades.
But Lawrence Yun, senior economist for the Realtors, noted that the expected price decline would be modest in comparison with the 50 percent appreciation in home prices that occurred during the boom period.
It had appeared that housing sales might be hitting a bottom at the end of last year. However, since that time, the troubles in the mortgage market, which has seen many subprime lenders forced to stop operations, has worsened the housing downturn.
"We've been anticipating slower home sales because many subprime loan products are no longer available," Yun said. "Fortunately, a wide availability of conventional mortgage products ... will help stabilize the market going forward."
Yun said the big rise in unsold homes on the market could be an indication that sellers are testing the market in the early spring in hopes of selling their homes and moving up to larger units, which he said would be a positive sign of a rebound in housing.
But other analysts were not so optimistic, expressing concerns that housing could remain under downward pressure for the rest of this year and stage only a modest recovery in 2008.
"The continued decline in existing home sales and the huge rise in inventories put in doubt the hopes that the housing market is stabilizing," said Joel Naroff, chief economist at Naroff Economic Advisors.
The troubles in housing have acted to depress overall economic activity, which slowed to a growth rate of just 1.3 percent in the first three months of this year, the slowest economic growth rate in four years.
For April, sales of existing homes were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the South and 0.7 percent in the Midwest.
Housing accounts for about 23 percent of the U.S. economy, when taking into account purchases of furniture, appliances and other items for new homes, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. (baltimoresun.com)
Sales of existing homes fell more than expected in April while prices slid for a record ninth consecutive month, indicating further troubles ahead for the housing market.
The National Association of Realtors reported that sales of existing homes dropped by 2.6 percent last month to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace in nearly four years.
The median price of a home fell to $220,900, an 0.8 percent decline from the median price a year ago. The median is the point at which half the homes are sold for more and half for less.
In the Baltimore region, house values have continued to increase every month, though not at the double-digit rates registered during the height of the boom. The median price last month rose 2.61 percent to $275,000, according to Metropolitan Regional Information Systems.
But, as in the rest of the nation, Baltimore area home sales have been slumping for more than a year.
Last month, sales of homes sold through the multiple listing service sagged 11.23 percent from a year earlier. That was the fewest sold during any April since 2000, according to data from MRIS. Sales in Baltimore and the five surrounding counties have declined in 18 of the past 19 months.
The slide in existing home sales came after a report Thursday that showed a big 16.2 percent surge in sales of new homes in April that occurred as the median price of a new home fell by a record 11.1 percent from the previous month.
Analysts said the disparity in sales of new and existing homes for April reflected in part the decision by builders to aggressively cut prices to unload inventory while homeowners are still reluctant to lower their asking prices.
"The market is lousy," said David Sloan, senior economist with 4Cast, a market research firm in New York. "The overall economy is not growing particularly strong. The Fed is keeping interest rates reasonably high because it's worried about inflation. So I don't think much is going to change in the fundamentals of the housing market."
The supply of existing homes for sale shot up to a record total of 4.2 million in April, an increase of 394,000 from the March supply. Analysts predicted that this big inventory surge would act to further depress prices.
"We're swimming in supply," said Mike Larson, a real estate analyst with Weiss Research, who cited a number of factors for the unsold homes.
"Unrealistic sellers, stuck flippers, stretched borrowers, foreclosures. They're all contributing to a surge in homes on the market," he said. Flippers are investors who bought homes during the boom hoping to resell them for a quick profit only to be caught as the market softened.
Patrick Newport, an economist with Global Insight, said that the inventory bulge was "worrisome, since builders are less likely to start new homes as long as inventories are climbing."
A recovery in housing is being held back by a wave of subprime mortgage defaults, which is throwing homes back onto the market and prompting banks to tighten lending standards for borrowers with poor or limited credit histories.
Curbs on subprime lending "are expected to be a source of some restraint on home purchases and residential investment in coming quarters," Fed Chairman Ben S. Bernanke said May 17. Even so, Bernanke said he doesn't foresee "significant spillovers" from the subprime market to the rest of the economy.
Housing enjoyed an extended surge in which sales of both new and existing homes set records for five straight years until 2006. The Realtors are forecasting that existing home prices could decline by around 2 percent this year, which would be the first setback for an entire year on records that go back four decades.
But Lawrence Yun, senior economist for the Realtors, noted that the expected price decline would be modest in comparison with the 50 percent appreciation in home prices that occurred during the boom period.
It had appeared that housing sales might be hitting a bottom at the end of last year. However, since that time, the troubles in the mortgage market, which has seen many subprime lenders forced to stop operations, has worsened the housing downturn.
"We've been anticipating slower home sales because many subprime loan products are no longer available," Yun said. "Fortunately, a wide availability of conventional mortgage products ... will help stabilize the market going forward."
Yun said the big rise in unsold homes on the market could be an indication that sellers are testing the market in the early spring in hopes of selling their homes and moving up to larger units, which he said would be a positive sign of a rebound in housing.
But other analysts were not so optimistic, expressing concerns that housing could remain under downward pressure for the rest of this year and stage only a modest recovery in 2008.
"The continued decline in existing home sales and the huge rise in inventories put in doubt the hopes that the housing market is stabilizing," said Joel Naroff, chief economist at Naroff Economic Advisors.
The troubles in housing have acted to depress overall economic activity, which slowed to a growth rate of just 1.3 percent in the first three months of this year, the slowest economic growth rate in four years.
For April, sales of existing homes were weak in all parts of the country. The Northeast experienced the biggest decline, a fall of 8.8 percent in April from the March sales pace. Sales were down 1.7 percent in the West, 1.2 percent in the South and 0.7 percent in the Midwest.
Housing accounts for about 23 percent of the U.S. economy, when taking into account purchases of furniture, appliances and other items for new homes, according to the Joint Center for Housing Studies at Harvard University in Cambridge, Massachusetts. (baltimoresun.com)
Tuesday, May 22, 2007
Maryland: area home prices still rising
Region holding its value, while U.S. overall loses 1.8%
Baltimore's housing market is holding up better than the nation's as a whole, with the price of an existing single-family home rising nearly 5 percent in the first quarter over a year earlier. The gain in median price put the region among the top quarter of 145 metro areas surveyed by the National Association of Realtors and contrasted sharply with a 1.8 percent nationwide decline.
And the Cumberland area in Western Maryland, which has become one of the last markets in the country to experience a housing boom, registered the biggest increase in the nation, with the median price of a single-family home soaring 17 percent in the first three months of the year.
The Baltimore area's relative affordability in the pricey region surrounding the nation's capital helped drive demand, real estate experts said, fueling the association's reported 4.9 percent increase in median price to $278,900.
By contrast, the median price - or midpoint - of an existing single-family home in the United States slid 1.8 percent, to $212,300, the association said. Half of homes sold for more and half for less.
The Baltimore area ranked 34th among the 145 statistical areas in home value appreciation, NAR statistics showed. Eighty-two of those areas saw prices increase over a year ago, including 11 areas with double-digit gains, while 62 experienced price declines; one was unchanged.
In the Cumberland region, prices jumped by the biggest percentage increase, to a median of $100,000 from $85,400 in the first quarter of 2006.
"What this comes down to is affordability," said Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors. "When you look at [the Baltimore-area]market, ... it is largely affordable when you compare [it] to most of the rest of the state and Washington and Virginia. And interest rates have stayed relatively low, helping to fuel demand."
Areas that are benefiting now experienced less speculative buying, and in turn less of a huge spike in prices over the four-year housing boom, experts said. .
"The focus has turned to value," said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.
"Many prospective home buyers sought to place as large a bet as possible on the housing market. Today, that speculative aspect of the housing market has effectively been extinguished and now the buyer is focused on ... making a good deal and buying as much house as possible for their money," Basu said.
Buyers perceive value in Baltimore's market, Basu said. "That explains why Baltimore-area prices have held their own, even as Washington-area price changes have in many instances turned negative,"
Cumberland, too, benefited from the perception of value and is just now seeing the effects of a housing boom that had previously swept through the Baltimore market, economists said. As prices have risen in adjoining Washington and Garrett counties, buyers have been attracted to lower prices in Allegany County, Basu said.
"Cumberland is, from a Western Maryland perspective, the oasis of affordability," he said.
Prices have held up despite slowing sales. In Maryland, the report said, sales, including single-family homes and condos, dropped 10 percent in the first quarter, to 115,000 from 128,400 in the year-earlier period.
Nationwide sales dipped to 6.41 million, down 6.6 percent from 6.86 million sold in the first three months of 2006, the NAR report said. But an NAR economist said the market has likely bottomed.
Fourteen states and Washington showed an improvement in sales in the first quarter, said Lawrence Yun, NAR senior economist, compared to six states posting increases in the fourth quarter. On a quarter-to-quarter basis, sales rose in the United States by 2.4 percent, the NAR said.
The numbers suggest the market is stabilizing, thanks to job growth and relatively low mortgage interest rates that have hovered at just above 6 percent.
"We are encouraged by the fact that there is modest improvement in our quarterly figures, less of a decline in prices and a modest uptick in sales," Yun said. "This is positive compared to what we had experienced before."
He said he would not be surprised to see sales volume increase, on a year-over-year basis, by either the fourth quarter or the first quarter of 2008. (baltimoresun.com)
Baltimore's housing market is holding up better than the nation's as a whole, with the price of an existing single-family home rising nearly 5 percent in the first quarter over a year earlier. The gain in median price put the region among the top quarter of 145 metro areas surveyed by the National Association of Realtors and contrasted sharply with a 1.8 percent nationwide decline.
And the Cumberland area in Western Maryland, which has become one of the last markets in the country to experience a housing boom, registered the biggest increase in the nation, with the median price of a single-family home soaring 17 percent in the first three months of the year.
The Baltimore area's relative affordability in the pricey region surrounding the nation's capital helped drive demand, real estate experts said, fueling the association's reported 4.9 percent increase in median price to $278,900.
By contrast, the median price - or midpoint - of an existing single-family home in the United States slid 1.8 percent, to $212,300, the association said. Half of homes sold for more and half for less.
The Baltimore area ranked 34th among the 145 statistical areas in home value appreciation, NAR statistics showed. Eighty-two of those areas saw prices increase over a year ago, including 11 areas with double-digit gains, while 62 experienced price declines; one was unchanged.
In the Cumberland region, prices jumped by the biggest percentage increase, to a median of $100,000 from $85,400 in the first quarter of 2006.
"What this comes down to is affordability," said Joseph T. Landers III, executive vice president of the Greater Baltimore Board of Realtors. "When you look at [the Baltimore-area]market, ... it is largely affordable when you compare [it] to most of the rest of the state and Washington and Virginia. And interest rates have stayed relatively low, helping to fuel demand."
Areas that are benefiting now experienced less speculative buying, and in turn less of a huge spike in prices over the four-year housing boom, experts said. .
"The focus has turned to value," said Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.
"Many prospective home buyers sought to place as large a bet as possible on the housing market. Today, that speculative aspect of the housing market has effectively been extinguished and now the buyer is focused on ... making a good deal and buying as much house as possible for their money," Basu said.
Buyers perceive value in Baltimore's market, Basu said. "That explains why Baltimore-area prices have held their own, even as Washington-area price changes have in many instances turned negative,"
Cumberland, too, benefited from the perception of value and is just now seeing the effects of a housing boom that had previously swept through the Baltimore market, economists said. As prices have risen in adjoining Washington and Garrett counties, buyers have been attracted to lower prices in Allegany County, Basu said.
"Cumberland is, from a Western Maryland perspective, the oasis of affordability," he said.
Prices have held up despite slowing sales. In Maryland, the report said, sales, including single-family homes and condos, dropped 10 percent in the first quarter, to 115,000 from 128,400 in the year-earlier period.
Nationwide sales dipped to 6.41 million, down 6.6 percent from 6.86 million sold in the first three months of 2006, the NAR report said. But an NAR economist said the market has likely bottomed.
Fourteen states and Washington showed an improvement in sales in the first quarter, said Lawrence Yun, NAR senior economist, compared to six states posting increases in the fourth quarter. On a quarter-to-quarter basis, sales rose in the United States by 2.4 percent, the NAR said.
The numbers suggest the market is stabilizing, thanks to job growth and relatively low mortgage interest rates that have hovered at just above 6 percent.
"We are encouraged by the fact that there is modest improvement in our quarterly figures, less of a decline in prices and a modest uptick in sales," Yun said. "This is positive compared to what we had experienced before."
He said he would not be surprised to see sales volume increase, on a year-over-year basis, by either the fourth quarter or the first quarter of 2008. (baltimoresun.com)
Friday, May 18, 2007
All Bets Are Off for Housing Sector Recovery
Housing Slide Continues in April as Inventory Remains High and Demand Soft
The U.S. housing market continues to search for a bottom. The latest housing figures for April show prices, sales, building permits, housing completions and industry confidence all continuing to deteriorate. The continued weakening also has analysts and economists adjusting their forecasts for the rest of the year downward - again.
The national median existing single-family home price fell to $212,300 in the first quarter, down 1.8% from a year ago when the median price was $216,100, according to the National Association of Realtors.
Total existing-home sales were down 6.6% in the first quarter compared to a year ago.
Privately-owned housing units authorized by building permits in April were down 8.9% from March and 28.1% from a year ago.
Privately-owned housing completions in April were down 5.8% from March and 26% a year ago.
While the NAR points out that 82 of 145 metros showed price increases from a year ago, the organization also notes that the largest single-family home price increase were in out of the way areas or severely depressed markets. For example in the Cumberland area of Maryland and West Virginia, the median price of $100,000 was 17.1% higher than a year earlier. Next was Beaumont-Port Arthur, TX, at $115,800, up 16.5% from the first quarter of 2006, followed by the Gulfport-Biloxi area of Mississippi, where the first quarter median price increased 15.7% to $153,700.
More typical of the major housing markets is what has been occurring in Florida.
Statewide, sales of single-family existing homes totaled 33,748 during the three-month period, a decrease of 26% compared to the same time a year earlier, according to the Florida Association of Realtors.
The statewide existing-home median sales price was $237,000 in the first quarter; a year ago, it was $243,500 for a decrease of 3%.
"The bottom line for housing is that it has had a significant depressing effect on real GDP growth over the past six months or so," said Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco. "While I wouldn't be surprised to see it begin to turn around in the latter half of this year, I also wouldn't want to bet on it. In other words, housing remains a significant drag on the economy."
Residential investment contracted at a 17% annual rate in the first quarter, knocking off about 1 percentage point from annualized real GDP growth, according to the San Francisco Fed. In the fourth quarter of last year, residential construction fell at a rate of more than 19%, trimming overall growth by about 1.25 percentage points.
There is still the risk that residential investment will slip further given the sizeable overhang of inventories of unsold new single-family homes, the rise in the homeowner vacancy rate, the still weak demand for single-family houses, and the tightening of credit conditions for home mortgage borrowers, the San Francisco Fed said.
As a consequence this week, the National Association of Realtors revised its housing forecast for the year, saying it expected it to be "somewhat lower," due in part to stricter lending standards and the evaporation of subprime mortgage origination.
Existing-home sales are now projected to total 6.29 million this year and 6.49 million in 2008, compared with 6.48 million last year. New-home sales are projected at 864,000 in 2007 and 936,000 next year, lower than the 1.05 million in 2006. Housing starts should total 1.46 million units this year and 1.52 million in 2008, down from 1.8 million last year.
The 30-year fixed-rate mortgage should rise slowly to 6.5% by the fourth quarter. Last week, Freddie Mac reported the 30-year rate was 6.16%.
Ongoing concerns about subprime-related problems in the mortgage market have also caused builder confidence about the state of housing demand to erode, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
The index is at its lowest level in its current cycle, which was previously hit in September of 2006.
"Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead," said Brian Catalde, NAHB president and a homebuilder from El Segundo, CA.
"The crisis in the subprime sector has infected other parts of the mortgage market as well as consumer psychology, and as a result the housing outlook has deteriorated," added David Seiders, NAHB chief economist. "We're now projecting that home sales and housing production will not begin improving until late this year, and we're expecting the early stages of the subsequent recovery to be quite sluggish. There still are tremendous uncertainties regarding our baseline forecast going forward, owing largely to the subprime crisis that is having widespread effects throughout the mortgage market."
More telling perhaps are the adjustments homebuilders are making to their original forecasts.
"Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets, said Robert I. Toll, chairman and CEO of Toll Brothers Inc. "Although there is variation among markets, our traffic this quarter on average has been flat on a gross basis and down approximately 20% on a per community, same-store basis, compared to last year's second quarter."
"Given the current state of the market, we no longer expect to achieve the most recent guidance we provided when we announced first quarter earnings," Toll added.
Going into the year, Toll Brothers estimated it would take about $60 million in impairment charges this year. It will blow way through that before midyear.
"While we have not yet finalized our analysis, we estimate that write-downs pretax in the second quarter will be between $90 million and $130 million, nearly all of which are impairments on communities we already own," Toll said. (costar.com)
The U.S. housing market continues to search for a bottom. The latest housing figures for April show prices, sales, building permits, housing completions and industry confidence all continuing to deteriorate. The continued weakening also has analysts and economists adjusting their forecasts for the rest of the year downward - again.
The national median existing single-family home price fell to $212,300 in the first quarter, down 1.8% from a year ago when the median price was $216,100, according to the National Association of Realtors.
Total existing-home sales were down 6.6% in the first quarter compared to a year ago.
Privately-owned housing units authorized by building permits in April were down 8.9% from March and 28.1% from a year ago.
Privately-owned housing completions in April were down 5.8% from March and 26% a year ago.
While the NAR points out that 82 of 145 metros showed price increases from a year ago, the organization also notes that the largest single-family home price increase were in out of the way areas or severely depressed markets. For example in the Cumberland area of Maryland and West Virginia, the median price of $100,000 was 17.1% higher than a year earlier. Next was Beaumont-Port Arthur, TX, at $115,800, up 16.5% from the first quarter of 2006, followed by the Gulfport-Biloxi area of Mississippi, where the first quarter median price increased 15.7% to $153,700.
More typical of the major housing markets is what has been occurring in Florida.
Statewide, sales of single-family existing homes totaled 33,748 during the three-month period, a decrease of 26% compared to the same time a year earlier, according to the Florida Association of Realtors.
The statewide existing-home median sales price was $237,000 in the first quarter; a year ago, it was $243,500 for a decrease of 3%.
"The bottom line for housing is that it has had a significant depressing effect on real GDP growth over the past six months or so," said Janet L. Yellen, president and CEO of the Federal Reserve Bank of San Francisco. "While I wouldn't be surprised to see it begin to turn around in the latter half of this year, I also wouldn't want to bet on it. In other words, housing remains a significant drag on the economy."
Residential investment contracted at a 17% annual rate in the first quarter, knocking off about 1 percentage point from annualized real GDP growth, according to the San Francisco Fed. In the fourth quarter of last year, residential construction fell at a rate of more than 19%, trimming overall growth by about 1.25 percentage points.
There is still the risk that residential investment will slip further given the sizeable overhang of inventories of unsold new single-family homes, the rise in the homeowner vacancy rate, the still weak demand for single-family houses, and the tightening of credit conditions for home mortgage borrowers, the San Francisco Fed said.
As a consequence this week, the National Association of Realtors revised its housing forecast for the year, saying it expected it to be "somewhat lower," due in part to stricter lending standards and the evaporation of subprime mortgage origination.
Existing-home sales are now projected to total 6.29 million this year and 6.49 million in 2008, compared with 6.48 million last year. New-home sales are projected at 864,000 in 2007 and 936,000 next year, lower than the 1.05 million in 2006. Housing starts should total 1.46 million units this year and 1.52 million in 2008, down from 1.8 million last year.
The 30-year fixed-rate mortgage should rise slowly to 6.5% by the fourth quarter. Last week, Freddie Mac reported the 30-year rate was 6.16%.
Ongoing concerns about subprime-related problems in the mortgage market have also caused builder confidence about the state of housing demand to erode, according to the National Association of Home Builders/Wells Fargo Housing Market Index.
The index is at its lowest level in its current cycle, which was previously hit in September of 2006.
"Builders are feeling the impacts of tighter lending standards on current home sales as well as cancellations, and they are bracing for continued challenges ahead," said Brian Catalde, NAHB president and a homebuilder from El Segundo, CA.
"The crisis in the subprime sector has infected other parts of the mortgage market as well as consumer psychology, and as a result the housing outlook has deteriorated," added David Seiders, NAHB chief economist. "We're now projecting that home sales and housing production will not begin improving until late this year, and we're expecting the early stages of the subsequent recovery to be quite sluggish. There still are tremendous uncertainties regarding our baseline forecast going forward, owing largely to the subprime crisis that is having widespread effects throughout the mortgage market."
More telling perhaps are the adjustments homebuilders are making to their original forecasts.
"Twenty months into this housing downturn, we continue to face difficult conditions in most of our markets, said Robert I. Toll, chairman and CEO of Toll Brothers Inc. "Although there is variation among markets, our traffic this quarter on average has been flat on a gross basis and down approximately 20% on a per community, same-store basis, compared to last year's second quarter."
"Given the current state of the market, we no longer expect to achieve the most recent guidance we provided when we announced first quarter earnings," Toll added.
Going into the year, Toll Brothers estimated it would take about $60 million in impairment charges this year. It will blow way through that before midyear.
"While we have not yet finalized our analysis, we estimate that write-downs pretax in the second quarter will be between $90 million and $130 million, nearly all of which are impairments on communities we already own," Toll said. (costar.com)
Thursday, May 17, 2007
HUD to seek ban on mortgage 'aid'
WASHINGTON // The Department of Housing and Urban Development plans to seek a ban on a certain type of down payment assistance that has grown sevenfold this decade and contributed to a surge in foreclosures of government-backed mortgages.
Nonprofit groups, such as Nehemiah Corp. of America and AmeriDream Inc. of Gaithersburg, Md., provide the down payment help and are then reimbursed by the seller. The programs are "a contributing factor of increased risk in our portfolio" of loans, HUD spokesman Lemar Wooley said in an e-mail.
HUD plans to propose the ban this month for public comment, possibly as early as this week, Wooley said. More than 100,000 low- and moderate-income consumers bought homes using such programs last year.
The percentage of foreclosures on these homes is more than double that on other loans sponsored by the Federal Housing Administration, according to agency audits.
Once HUD issues its rule proposal, industry and consumer groups will have 60 days to submit comments.
In 1999, HUD proposed a similar ban and withdrew it in 2001 after industry opposition.
Foreclosures rose last year in the Baltimore metropolitan area - particularly the suburbs - as problematic loans and a housing market slowdown buffeted new owners with little equity.
But FHA loans weren't part of the problem. HUD records show a significant drop in FHA foreclosures, the result of aggressive efforts to stem the fallout from illegal flipping in the late 1990s.
Vincent P. Quayle, executive director of the St. Ambrose Housing Aid Center, a Baltimore nonprofit that does not offer seller-financed assistance, believes fewer local homebuyers have turned to such programs in the past few years because they can obtain assistance through the city and the state.
But he's still pleased to hear HUD is trying for a ban on seller-financed help. He said buyers paid for that help, literally: "The seller would just raise the price."
Under the program, groups including Sacramento, Calif., Nehemiah and AmeriDream give buyers an average of about $3,400 for a down payment.
They are then reimbursed by sellers of the house, who also pay a service fee. The arrangement was designed to circumvent U.S. rules that bar sellers from giving direct assistance.
Sellers have tried to recover the cost of the fee they pay nonprofits by raising the price of the house an average of 3 percent, a 2005 study by Congress' nonpartisan Government Accountability Office found.
The number of FHA-backed homes purchased with nonprofit assistance has risen to 102,921 in 2006 from 14,603 in 2000, HUD data show. While these payments accounted for just 2 percent of all FHA loans in 2000, they soared to 33 percent of the loans last year.
The Internal Revenue Service held last year that groups providing down payment assistance did not quality for tax exemptions and said it was examining the practices of 185 nonprofits. AmeriDream and Nehemiah said they are in talks with the IRS.
(Bloomberg News, baltimoresun.com)
Nonprofit groups, such as Nehemiah Corp. of America and AmeriDream Inc. of Gaithersburg, Md., provide the down payment help and are then reimbursed by the seller. The programs are "a contributing factor of increased risk in our portfolio" of loans, HUD spokesman Lemar Wooley said in an e-mail.
HUD plans to propose the ban this month for public comment, possibly as early as this week, Wooley said. More than 100,000 low- and moderate-income consumers bought homes using such programs last year.
The percentage of foreclosures on these homes is more than double that on other loans sponsored by the Federal Housing Administration, according to agency audits.
Once HUD issues its rule proposal, industry and consumer groups will have 60 days to submit comments.
In 1999, HUD proposed a similar ban and withdrew it in 2001 after industry opposition.
Foreclosures rose last year in the Baltimore metropolitan area - particularly the suburbs - as problematic loans and a housing market slowdown buffeted new owners with little equity.
But FHA loans weren't part of the problem. HUD records show a significant drop in FHA foreclosures, the result of aggressive efforts to stem the fallout from illegal flipping in the late 1990s.
Vincent P. Quayle, executive director of the St. Ambrose Housing Aid Center, a Baltimore nonprofit that does not offer seller-financed assistance, believes fewer local homebuyers have turned to such programs in the past few years because they can obtain assistance through the city and the state.
But he's still pleased to hear HUD is trying for a ban on seller-financed help. He said buyers paid for that help, literally: "The seller would just raise the price."
Under the program, groups including Sacramento, Calif., Nehemiah and AmeriDream give buyers an average of about $3,400 for a down payment.
They are then reimbursed by sellers of the house, who also pay a service fee. The arrangement was designed to circumvent U.S. rules that bar sellers from giving direct assistance.
Sellers have tried to recover the cost of the fee they pay nonprofits by raising the price of the house an average of 3 percent, a 2005 study by Congress' nonpartisan Government Accountability Office found.
The number of FHA-backed homes purchased with nonprofit assistance has risen to 102,921 in 2006 from 14,603 in 2000, HUD data show. While these payments accounted for just 2 percent of all FHA loans in 2000, they soared to 33 percent of the loans last year.
The Internal Revenue Service held last year that groups providing down payment assistance did not quality for tax exemptions and said it was examining the practices of 185 nonprofits. AmeriDream and Nehemiah said they are in talks with the IRS.
(Bloomberg News, baltimoresun.com)
Wednesday, May 16, 2007
Baltimore City: Affordable housing at a premium
The Baltimore region lacks a supply of affordable housing, a local housing official said. BALTIMORE (Map, News) - Work force housing is a key to the future of Baltimore-area real estate. For the housing market to be successful, it must create a system to support people moving from low-income housing to moderate- and then high-income homes, Ilene Kessler, president of the Maryland Association of Realtors, told The Examiner.
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
“This is something [everyone working together] has to address and can’t say another community will handle it,” Kessler said. “It affects all of us and is a pressing issue.”
People who read this also read:
Kettler buys Pentagon City parcel for $220M
Potential neighbors to relocated clubs to get $3.6M in road improvements
Tanker driver in fiery crash was carrying ethanol
Housing Slump Continues in April
Richardson holds stock in oil refinery firm
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
Work force housing is at the core of that cycle, creating stable, affordable options for local hardworking residents, she said.
With an influx of middle-class and blue-collar workers coming to the area as a result of the Base Realignment and Closure initiative, finding and identifying housing to meet their needs will be key, Kessler said.
“This is something [everyone working together] has to address and can’t say another community will handle it,” Kessler said. “It affects all of us and is a pressing issue.”
People who read this also read:
Kettler buys Pentagon City parcel for $220M
Potential neighbors to relocated clubs to get $3.6M in road improvements
Tanker driver in fiery crash was carrying ethanol
Housing Slump Continues in April
Richardson holds stock in oil refinery firm
In the Baltimore region, March statistics by Metropolitan Regional Information Systems have houses selling for an average of $306,588. Locally, Anne Arundel County, where Fort Meade is, has homes going for an average of $395,037, while nearby Baltimore City remains more affordable at $178,019. In Harford County, where the Aberdeen Proving Ground is, homes are selling for an average of $296,432.
“The region lacks an adequate supply of housing in decent condition that is available to a wide range of low- and moderate-income households,” said Tania Baker, acting director of communications for Baltimore Housing.
About 28,000 new households will soon move to the area, with about 24,000 of these being homebuyers, the Maryland BRAC study conducted by the Maryland Department of Business and Economic Development found.
With the Mortgage Bankers Association reporting that Maryland had a 12.39 percent increase in subprime loans for the last quarter, Kessler said it was important that people in the housing market work together to keep these potential buyers in their homes.
(examiner.com)
Monday, May 14, 2007
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)
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)
Friday, May 11, 2007
Region's home prices rise just 1.8% in April
Baltimore records first decline in 4 years.
Amid a continuing slowdown, home prices in metropolitan Baltimore eked out a slim gain in April, thanks largely to strength in Baltimore County. The city recorded its first decline in more than four years.
The average sale price in Baltimore and the five surrounding counties rose 1.88 percent from $310,323 in April last year, Metropolitan Regional Information Systems Inc. reported yesterday.
Half the jurisdictions in the region registered an increase, and half a decrease.
Baltimore County posted the strongest appreciation at over 6 percent, with slight gains in Howard and Carroll counties. Anne Arundel County had the biggest drop, at nearly 5 percent.
The mixed-price picture came as home sales continued to stumble. The 2,831 homes sold last month were 11.23 percent fewer than the 3,189 homes sold in April 2006, according to MRIS. Sales declined in each jurisdiction except Howard and Carroll counties.
In Baltimore City, the average price fell a little more than $3,000 - or 1.79 percent - from April a year ago, the first drop since January 2003. Average gains have soared by double digits through much of that time as homebuyers sought cheaper alternatives to the counties and an urban lifestyle.
But as the booming real estate market has cooled, the pace of price appreciation has been shrinking since the middle of last year. The city's price drop likely reflects a slump in once rapidly appreciating, expensive waterfront neighborhoods such as Canton and Federal Hill, rather than a broader drop, said one economist yesterday.
"Those were areas seen as very hot markets," said Daraius Irani, director of the applied economics group at RESI, Towson University's research and consulting arm.
"People rushed into those markets and housing prices were bid up substantially. As the market has softened, and there is a decline in demand and tightening credit restrictions, those are areas that are likely to see slowdown. If you're not selling as many $500,000 units as you did in years past, that's going to tend to pull down overall averages."
While April's settlements reflect contracts signed in preceding months, the arrival of spring hasn't brought the boost to the housing market that typically comes with the season, agents said. And some believe that tightening credit requirements - the result of problems with subprime loans and rising foreclosure rates - will reduce the pool of buyers.
"It is somewhat of a random market," said Tom Mooney, a partner with O'Conor & Mooney Realtors in Baltimore. "We're getting showings, but buyers are not as quick to pull the trigger. There's very little impulse buying any more."
While 6,524 homes were listed for sale in April alone, contracts and contingent contracts were reached on just over half that number, or 3,536, properties, the MRIS said.
The number of homes for sale topped 17,000, nearly three times as many as were listed two years earlier at the height of the housing boom. Homes stayed on the market an average of three months, compared with the average of two months it took to sell in April 2006, MRIS said.
Buyers are holding out, expecting that prices will come down more.
"The market has not stabilized to the point where everybody is on the same page yet," said Sharon Martin-Sims, a broker with S. Lee Martin & Co. in Baltimore. "For this time of year, we should have been a little stronger by now."
With homes staying on the market longer, buyers have more to choose from, she said.
"Since buyers know it's a buyers market, they want to offer much lower than what sellers are asking for," Martin-Sims said. "Sellers, on the other side, don't want to understand the fact that prices should be coming down a little bit."
Offers tend to be for less than asking price, by 5 percent to 10 percent, on average, Realtors said. Martin-Sims said sellers are beginning to adjust prices more quickly.
A four-bedroom Colonial with a two-car garage in the Ten Hills neighborhood of Baltimore went on sale for $499,000 in September and has now been reduced to $399,000. Another house in Randallstown, a three- bedroom rancher, went on the market at $314,500 and was reduced by $10,000 after 30 days, Martin-Sims said.
Diane Boynton said she worried when she and her husband decided in April to sell their Timonium townhouse so they can move to a retirement community. "The bad part was the market," Boynton said. "We thought this is going to be a mess. We just missed the right time."
Boynton said the couple followed their real estate agent's advice to price the home within a certain range and listed the two-bedroom townhouse at $305,000, below prices neighbors got last year. The house sold in just five days for the asking price.
(baltimoresun.com)
Amid a continuing slowdown, home prices in metropolitan Baltimore eked out a slim gain in April, thanks largely to strength in Baltimore County. The city recorded its first decline in more than four years.
The average sale price in Baltimore and the five surrounding counties rose 1.88 percent from $310,323 in April last year, Metropolitan Regional Information Systems Inc. reported yesterday.
Half the jurisdictions in the region registered an increase, and half a decrease.
Baltimore County posted the strongest appreciation at over 6 percent, with slight gains in Howard and Carroll counties. Anne Arundel County had the biggest drop, at nearly 5 percent.
The mixed-price picture came as home sales continued to stumble. The 2,831 homes sold last month were 11.23 percent fewer than the 3,189 homes sold in April 2006, according to MRIS. Sales declined in each jurisdiction except Howard and Carroll counties.
In Baltimore City, the average price fell a little more than $3,000 - or 1.79 percent - from April a year ago, the first drop since January 2003. Average gains have soared by double digits through much of that time as homebuyers sought cheaper alternatives to the counties and an urban lifestyle.
But as the booming real estate market has cooled, the pace of price appreciation has been shrinking since the middle of last year. The city's price drop likely reflects a slump in once rapidly appreciating, expensive waterfront neighborhoods such as Canton and Federal Hill, rather than a broader drop, said one economist yesterday.
"Those were areas seen as very hot markets," said Daraius Irani, director of the applied economics group at RESI, Towson University's research and consulting arm.
"People rushed into those markets and housing prices were bid up substantially. As the market has softened, and there is a decline in demand and tightening credit restrictions, those are areas that are likely to see slowdown. If you're not selling as many $500,000 units as you did in years past, that's going to tend to pull down overall averages."
While April's settlements reflect contracts signed in preceding months, the arrival of spring hasn't brought the boost to the housing market that typically comes with the season, agents said. And some believe that tightening credit requirements - the result of problems with subprime loans and rising foreclosure rates - will reduce the pool of buyers.
"It is somewhat of a random market," said Tom Mooney, a partner with O'Conor & Mooney Realtors in Baltimore. "We're getting showings, but buyers are not as quick to pull the trigger. There's very little impulse buying any more."
While 6,524 homes were listed for sale in April alone, contracts and contingent contracts were reached on just over half that number, or 3,536, properties, the MRIS said.
The number of homes for sale topped 17,000, nearly three times as many as were listed two years earlier at the height of the housing boom. Homes stayed on the market an average of three months, compared with the average of two months it took to sell in April 2006, MRIS said.
Buyers are holding out, expecting that prices will come down more.
"The market has not stabilized to the point where everybody is on the same page yet," said Sharon Martin-Sims, a broker with S. Lee Martin & Co. in Baltimore. "For this time of year, we should have been a little stronger by now."
With homes staying on the market longer, buyers have more to choose from, she said.
"Since buyers know it's a buyers market, they want to offer much lower than what sellers are asking for," Martin-Sims said. "Sellers, on the other side, don't want to understand the fact that prices should be coming down a little bit."
Offers tend to be for less than asking price, by 5 percent to 10 percent, on average, Realtors said. Martin-Sims said sellers are beginning to adjust prices more quickly.
A four-bedroom Colonial with a two-car garage in the Ten Hills neighborhood of Baltimore went on sale for $499,000 in September and has now been reduced to $399,000. Another house in Randallstown, a three- bedroom rancher, went on the market at $314,500 and was reduced by $10,000 after 30 days, Martin-Sims said.
Diane Boynton said she worried when she and her husband decided in April to sell their Timonium townhouse so they can move to a retirement community. "The bad part was the market," Boynton said. "We thought this is going to be a mess. We just missed the right time."
Boynton said the couple followed their real estate agent's advice to price the home within a certain range and listed the two-bedroom townhouse at $305,000, below prices neighbors got last year. The house sold in just five days for the asking price.
(baltimoresun.com)
Tuesday, May 8, 2007
Maryland: Region avoids housing slump
Despite slower sales, prices are still rising in Baltimore area.
Baltimore's cooling housing market should continue to dodge the price slumps that have hit other parts of the country, experts said yesterday.
Home values will continue to gain moderately through the end of the year despite the slowdown in sales, thanks to relatively strong employment and job growth in the region, predicted Gregory H. Leisch, chief executive officer of Washington real estate consulting firm Delta Associates. Leisch presented his forecast at a housing outlook conference held by Metropolitan Regional Information Systems Inc., a Rockville-based real estate listing service that covers parts of Maryland, Washington, Northern Virginia, West Virginia and Pennsylvania.
The median price of a single-family home in the United States dipped 2.7 percent in 2006, compared with a year earlier, Leisch said. But it rose 4.8 percent in the Baltimore area, surpassing price gains in Chicago, New York and Los Angeles, Leisch said, even as the number of homes sold fell 13 percent.
And the average home price remained stable in the first quarter of this year.
The area, which has an unemployment rate below the national average, has been helped by its shift from a manufacturing base to an economy with growth in the medical, education and defense sectors, Leisch said.
"Baltimore was a Rust Belt city and now is one of the best-balanced regional economies," he said, with consistently high job growth and high-quality jobs, and thousands more expected in the next four years from a federal base realignment, know as BRAC, that will bring jobs to Fort Meade and Aberdeen Proving Ground.
"Is that sufficient to support a sturdy housing market? We think so," said Leisch.
The Washington metro area also fared well in the first three months of this year despite a slower pace of sales, according to the MRIS Trends in Housing Report, released in conjunction with the series of forecast conferences, including yesterday's at Martin's West in Baltimore County.
Though prices in the Baltimore region are projected to increase, values are not expected to approach the double-digit gains that persisted into the second quarter of last year.
And the average number of days homes are staying on the market has continued to rise, from 37 days in 2005 to 60 days in 2006 to 93 days in the first three months of this year.
Daraius Irani, the director of the Applied Economics Group at Towson University's Regional Economic Studies Institute and a panelist at yesterday's event, said job growth in Maryland has not been as strong as in past years.
"We are very puzzled by the fact that job growth has been anemic but unemployment is low," he said. "We view it as not enough job candidates are qualified in these high-skill fields.
The flood of new military and related jobs coming from BRAC will likely attract other companies seeking to locate near a concentration of high-tech businesses, Irani said.
Some 40,000 to 60,000 jobs overall are anticipated by 2011, creating an additional 25,000 households in Maryland and generating an estimated $500 million in income and property taxes annually, said Lisa Swoboda, a panelist and deputy director of the Office of Military and Federal Affairs in the state's Department of Business and Economic Development.
(Baltimore Sun)
Baltimore's cooling housing market should continue to dodge the price slumps that have hit other parts of the country, experts said yesterday.
Home values will continue to gain moderately through the end of the year despite the slowdown in sales, thanks to relatively strong employment and job growth in the region, predicted Gregory H. Leisch, chief executive officer of Washington real estate consulting firm Delta Associates. Leisch presented his forecast at a housing outlook conference held by Metropolitan Regional Information Systems Inc., a Rockville-based real estate listing service that covers parts of Maryland, Washington, Northern Virginia, West Virginia and Pennsylvania.
The median price of a single-family home in the United States dipped 2.7 percent in 2006, compared with a year earlier, Leisch said. But it rose 4.8 percent in the Baltimore area, surpassing price gains in Chicago, New York and Los Angeles, Leisch said, even as the number of homes sold fell 13 percent.
And the average home price remained stable in the first quarter of this year.
The area, which has an unemployment rate below the national average, has been helped by its shift from a manufacturing base to an economy with growth in the medical, education and defense sectors, Leisch said.
"Baltimore was a Rust Belt city and now is one of the best-balanced regional economies," he said, with consistently high job growth and high-quality jobs, and thousands more expected in the next four years from a federal base realignment, know as BRAC, that will bring jobs to Fort Meade and Aberdeen Proving Ground.
"Is that sufficient to support a sturdy housing market? We think so," said Leisch.
The Washington metro area also fared well in the first three months of this year despite a slower pace of sales, according to the MRIS Trends in Housing Report, released in conjunction with the series of forecast conferences, including yesterday's at Martin's West in Baltimore County.
Though prices in the Baltimore region are projected to increase, values are not expected to approach the double-digit gains that persisted into the second quarter of last year.
And the average number of days homes are staying on the market has continued to rise, from 37 days in 2005 to 60 days in 2006 to 93 days in the first three months of this year.
Daraius Irani, the director of the Applied Economics Group at Towson University's Regional Economic Studies Institute and a panelist at yesterday's event, said job growth in Maryland has not been as strong as in past years.
"We are very puzzled by the fact that job growth has been anemic but unemployment is low," he said. "We view it as not enough job candidates are qualified in these high-skill fields.
The flood of new military and related jobs coming from BRAC will likely attract other companies seeking to locate near a concentration of high-tech businesses, Irani said.
Some 40,000 to 60,000 jobs overall are anticipated by 2011, creating an additional 25,000 households in Maryland and generating an estimated $500 million in income and property taxes annually, said Lisa Swoboda, a panelist and deputy director of the Office of Military and Federal Affairs in the state's Department of Business and Economic Development.
(Baltimore Sun)
Thursday, May 3, 2007
Baltimore Housing Turning To Buyer's Market
(WJZ) BALTIMORE Sales are down and prices are up this spring, according to housing market specialists in the Baltimore region.As Derek Valcourt reports, the trend is painting a different picture of the Baltimore area's housing market than in the past few years, and analysts think it's a good thing for buyers.For Sale signs go up everyday in Baltimore and the surrounding area. Some are only there for a few days before homes are sold. Others take months.But, analysts are now saying houses are spending more time on the market than last year. Statistics show houses are taking between an average of 41 to 104 percent longer to sell."What's happened here in the last year or so is that the market has stabilized and it has gone to more of a normal market or more of a buyer's market," said Long and Foster realtor Sharon Blough.In addition, not as many homes are selling. Right now only about one out of five homes currently on the market sell each month."The number of properties sold were less than in previous years but at the same time the properties are still holding their value," said Blough.The sales slowdown, according to Blough, is due in part to the cost of home prices rising.In Carroll County average sale prices are up nearly 12 percent from this time last year. In Baltimore City prices are up nearly 10 percent, while other surrounding counties have seem more modest gains.Howard and Anne Arundel Counties have seen prices fall, but only slightly.Economist Anirban Basu said Baltimore's proximity to Washington and its affordability have helped keep prices rising."Actually, I think that the adjustment from the hot seller's market of 2004 and 2005 to a buyer's market has been as smooth as one could have hoped for," said Basu.Although other East Coast cities are suffering, the Baltimore region is holding its own."This could have been predicted because right now the buyers are focused on value," said Basu. "But they are looking for a place to live and they are looking for value and Baltimore offers that."According to experts, the best bet on selling a home quickly is to make sure it is priced reasonably--at or below comparable homes in the area.Spring usually sees an increase in home sales as many people get their tax returns and children prepare to finish up the school year.
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)
(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)
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