With her husband transferred to Florida, Emily Brown is trying to sell their house in Brewers Hill. They bought it new for $475,000 in 2006, and it's on the market at a reduced price of $384,000. If it doesn't sell soon, they expect to rent it for a loss. (Baltimore Sun photo by Tasha Treadwell / August 27, 2009) |
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Home sales continued to rise in the Baltimore metro area last month, though the velocity slowed.
Buyers got the keys for about 5 percent more homes in August than a year ago, the third month in a row that year-over-year sales increased, according to numbers released Thursday by Metropolitan Regional Information Systems. Year-over-year home sales rose about 10 percent for July and 2 percent for June.
It's the first stretch of increased buying since 2005, a frenzied time with fast-rising prices and go-go lending. Those unusual conditions - repeated in communities across the country - started a domino effect of economic woe, from foreclosures to bank failures to recession. Even with the recent upturn, sales in the Baltimore area are still less than half what they were at their peak in 2005.
While the number of home sales has risen, prices are still falling. The average last month, just over $295,000, is 7 percent less than a year ago. And it's $14,000 less than the average seller got in August 2005.
"The fact is, if it's priced right, it will sell," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors. "It may take a little longer than it did two years ago, but it will sell. And if it's priced wrong, it'll sit forever."
The housing market is split on price in another way, too. Home sales increased strongly - 23 percent - in the under-$250,000 price range. But sales of pricier homes fell by 9 percent.
That's bad news for the nearly 10,000 would-be sellers with asking prices above $250,000, especially those who bought at the peak of the market a few years back.
Emily and Bryan Brown purchased their Brewers Hill house, newly built with a garage, for $475,000 in 2006. Now they're trying to sell because Bryan Brown was transferred to Florida in July. Asking price: $384,000 - $91,000 less than they bought it for. So far, no offers.
Because their down payment was substantial, their asking price would allow them to walk away without bringing money to the settlement table. But not if they lower it further.
"It's very tight," said Emily Brown, 33. If they get no takers, "we're going to put it up for rent next month. ... From there, I'm not sure what we'll do. If we rent, we'll take a loss monthly - that's definite."
She's all too aware of the sales trends.
"The houses in the $250 [thousand] range seem to be moving," Brown said. "Once you get to around $400 [thousand] ... you have a smaller pool of people who are going to be looking at your house."
Lower-priced homes are more affordable for first-time buyers, a driving force in the market. They don't have a home they have to sell, and - unless they have a relatively high income - they qualify for the $8,000 tax credit the federal government is offering as a sweetener to bring them to the settlement table.
Buyers have to close on their purchases by Nov. 30, when the credit is due to expire. Gayle Briscoe, a real estate agent with Coldwell Banker in Catonsville, is telling everyone she knows that now is the time to act if they want the credit - or the time to position themselves for those buyers if they want to sell. The push is on by the housing industry to get Congress to extend or expand the credit, but she's not expecting results.
The impending deadline seems to be having an effect. Deals struck last month that haven't closed yet - future sales, if all goes well - were up 25 percent from a year earlier, according to MRIS, which runs the region's multiple-listing service.
"That $8,000 tax credit is definitely an incentive," said Mary Warlow, marketing director at Belair-Edison Neighborhoods, a nonprofit that offers homeownership counseling to prospective buyers.
People coming in for one-on-one counseling are closer to being ready to buy than the nonprofit is used to seeing. Even so, fewer prospective buyers overall are making appointments, Warlow said. With the economy casting a long shadow, it's only "the people who feel more secure in their job" who are thinking of getting a home soon, she said. Joblessness hit a 26-year high in Maryland this summer.
"The job market is a huge factor," she said.
Within the metro area, home sales increased the most in Carroll County, up 34 percent from a year ago. Every other metro-area jurisdiction saw an increase in buying except Baltimore and Baltimore County, each down 2 percent.
Average prices fell in every jurisdiction, ranging from 4 percent in Anne Arundel County to 11 percent in Harford and Baltimore counties.
Not a fun time to sell. But for Emily Brown, the Brewers Hill homeowner, there's one upside to the ordeal of relocating in a down market: Housing around Tampa has been much harder hit.
"I've seen houses down there - six bedrooms, three bathrooms - for $190 [thousand]," she said.
Buyers got the keys for about 5 percent more homes in August than a year ago, the third month in a row that year-over-year sales increased, according to numbers released Thursday by Metropolitan Regional Information Systems. Year-over-year home sales rose about 10 percent for July and 2 percent for June.
It's the first stretch of increased buying since 2005, a frenzied time with fast-rising prices and go-go lending. Those unusual conditions - repeated in communities across the country - started a domino effect of economic woe, from foreclosures to bank failures to recession. Even with the recent upturn, sales in the Baltimore area are still less than half what they were at their peak in 2005.
While the number of home sales has risen, prices are still falling. The average last month, just over $295,000, is 7 percent less than a year ago. And it's $14,000 less than the average seller got in August 2005.
"The fact is, if it's priced right, it will sell," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors. "It may take a little longer than it did two years ago, but it will sell. And if it's priced wrong, it'll sit forever."
The housing market is split on price in another way, too. Home sales increased strongly - 23 percent - in the under-$250,000 price range. But sales of pricier homes fell by 9 percent.
That's bad news for the nearly 10,000 would-be sellers with asking prices above $250,000, especially those who bought at the peak of the market a few years back.
Emily and Bryan Brown purchased their Brewers Hill house, newly built with a garage, for $475,000 in 2006. Now they're trying to sell because Bryan Brown was transferred to Florida in July. Asking price: $384,000 - $91,000 less than they bought it for. So far, no offers.
Because their down payment was substantial, their asking price would allow them to walk away without bringing money to the settlement table. But not if they lower it further.
"It's very tight," said Emily Brown, 33. If they get no takers, "we're going to put it up for rent next month. ... From there, I'm not sure what we'll do. If we rent, we'll take a loss monthly - that's definite."
She's all too aware of the sales trends.
"The houses in the $250 [thousand] range seem to be moving," Brown said. "Once you get to around $400 [thousand] ... you have a smaller pool of people who are going to be looking at your house."
Lower-priced homes are more affordable for first-time buyers, a driving force in the market. They don't have a home they have to sell, and - unless they have a relatively high income - they qualify for the $8,000 tax credit the federal government is offering as a sweetener to bring them to the settlement table.
Buyers have to close on their purchases by Nov. 30, when the credit is due to expire. Gayle Briscoe, a real estate agent with Coldwell Banker in Catonsville, is telling everyone she knows that now is the time to act if they want the credit - or the time to position themselves for those buyers if they want to sell. The push is on by the housing industry to get Congress to extend or expand the credit, but she's not expecting results.
The impending deadline seems to be having an effect. Deals struck last month that haven't closed yet - future sales, if all goes well - were up 25 percent from a year earlier, according to MRIS, which runs the region's multiple-listing service.
"That $8,000 tax credit is definitely an incentive," said Mary Warlow, marketing director at Belair-Edison Neighborhoods, a nonprofit that offers homeownership counseling to prospective buyers.
People coming in for one-on-one counseling are closer to being ready to buy than the nonprofit is used to seeing. Even so, fewer prospective buyers overall are making appointments, Warlow said. With the economy casting a long shadow, it's only "the people who feel more secure in their job" who are thinking of getting a home soon, she said. Joblessness hit a 26-year high in Maryland this summer.
"The job market is a huge factor," she said.
Within the metro area, home sales increased the most in Carroll County, up 34 percent from a year ago. Every other metro-area jurisdiction saw an increase in buying except Baltimore and Baltimore County, each down 2 percent.
Average prices fell in every jurisdiction, ranging from 4 percent in Anne Arundel County to 11 percent in Harford and Baltimore counties.
Not a fun time to sell. But for Emily Brown, the Brewers Hill homeowner, there's one upside to the ordeal of relocating in a down market: Housing around Tampa has been much harder hit.
"I've seen houses down there - six bedrooms, three bathrooms - for $190 [thousand]," she said.
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Stories like this kill me. Yeah, there are some outliers out there, but the vast majority of homeowners did NOT buy a luxury townhouse three years ago, and are forced to sell due to a job transfer. Most people with $475,000 for a house are not going to buy in the city - that's certainly not a first time homebuyer price, and you can get quite a bit more (including good schools and less taxes) in the county. Plus, everything I've ever heard and read is that if you plan on living somewhere for less than 5 years, then DON'T BUY! I'm sorry to hear the Brown's troubles, but the media is making too much of the current real estate situation.
toaster_oven (09/11/2009, 12:32 PM )