Andrew Wells is hoping to buy a Baltimore home for around the cost of an old car: Less than $10,000.
Turns out he's in good company.
One of every 10 city homes sold during the first half of the year — about 275 in all — fell in that price range. Twice as many sold for under $20,000.
Often foreclosures, these properties are usually in bad shape but seem like deals to real estate investors and the occasional hopeful owner-occupier — such as Wells.
"I don't have to worry about trying to get a loan," said Wells, 40, a bill-processing technician who works in Annapolis. "That was the purpose of me searching in that price range. I could buy something, pay cash, and I could live in it and renovate at the same time."
Almost exclusively a city phenomenon — very few homes in Baltimore's suburbs sold for less than $10,000 — it's a market that has expanded rapidly. More city homes sold for less than $10,000 between January and June than in all of 2009 and 2010 combined. Dozens of city neighborhoods had at least one such sale this year.
As very cheap homes change hands, average sale prices in Baltimore have plummeted. Seventy city neighborhoods saw average prices drop more than 20 percent versus a year ago, according to a Baltimore Sun analysis of data from Metropolitan Regional Information Systems. That's half of the neighborhoods with enough sales to allow for comparison.
Fewer than 10 percent of suburban communities around Baltimore experienced an average price decline that large. Prices in the region dropped 6 percent on average.
But with the city's faster-falling prices have come more buyers. Sales rose in more than half of the city's neighborhoods compared with the first six months of last year. Sales rose in fewer than 40 percent of suburban communities.
Still, both the city and suburbs have areas where sales are down sharply since the federal tax credit of up to $8,000 for first-time homebuyers expired last summer. The number of homes sold during the first half of this year fell more than 20 percent in one of every five city neighborhoods and suburban ZIP codes, according to the Sun analysis.
Six years since the peak of the housing bubble, the Baltimore region doesn't look as if it has recovered from the slide that followed.
The number of homes sold in the first half of the year is down nearly 50 percent from the level in the first half of 2005. Prices still are dropping in most communities. And at least some of the places where prices rose on average this year are actually seeing values fall — but buyers are using their greater purchasing power to get better homes, pushing the average upward.
Mortgage insurer PMI Group thinks the odds are against a turnaround on prices in the near term, considering the rates of unemployment and foreclosure. The firm calculated a nearly 70 percent chance that prices in the Baltimore area will be lower in early 2013 than they were at the beginning of this year.
David Berson, PMI's chief economist, said the weak job market has weighed on prospective buyers. He said a sustained pickup in hiring would give more people the ability — and confidence — to buy.
With more buyers would come more support for prices.
"One of the reasons we're seeing fewer transactions now is people are waiting for a bottom in prices," Berson added. "A lot of people probably would buy today, but they don't want to buy a depreciating asset."
The Sun's housing-market analysis includes city neighborhoods and ZIP codes in the region with at least five home sales between January and June last year and again this year. Rockville-based Metropolitan Regional Information Systems, which runs the multiple-listing service used to buy and sell homes in the area, provided the database of transactions.
As sales of ultra-cheap homes multiplied this year, the ultra-pricey end of the market was also showing a bit more life. Three homes — all in Annapolis — sold for more than $4 million each in the first half of the year, up from one in the region during all of last year.
But inexpensive is outnumbering expensive by a large margin. For every home that sold for more than $1 million in the region, 22 sold for less than $100,000.
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