Home sales ballooned in the Baltimore region in May, with prices rising significantly in Baltimore City but only modestly if at all in the surrounding counties.
As the annual home sales season gets fully underway, the region saw increases in the number of home sales closed, new contracts and new listings in May, according to an analysis released Wednesday by the research arm of the Metropolitan Regional Information Systems, the region's multiple listing service.
A total of 3,229 homes changed hands last month, up 16.7 percent from May 2014, RealEstate Business Intelligence reported. The median sales price for those homes remained flat at $250,000.
For 2015 so far, the number of home sales across the region is up 25.5 percent compared to the same point last year and at the highest level since 2006, according to RBI.
Home buyers placed contracts on 4,313 homes in May, up 18 percent compared to last year, while the number of properties on the market in May swelled 4.7 percent over the year before to more than 13,600.
"The good news is it's almost all good news," said Ross Mackesey, the president of the Greater Baltimore Board of Realtors.
John L. Heithaus, RBI's vice president of sales, said an increase in home sales, new contracts and inventory is a sign of a healthy real estate market.
"And all three showed their strength," he said. "It not only shows that we have a strong trend, but the economic value in the community is substantial."
He added that the unrest in Baltimore in late April and May, following the death of Freddie Gray in police custody, did not seem to adversely impact the market.
Home prices remained restrained in part by the rising inventory, which gives buyers more choices, according to RBI.
Mackesey also predicted that any pressure on prices to rise brought by the increased demand may be checked if the Federal Reserve raises rates, which many economists believe will happen sometime this year.
"You're not going see them drop — there's too much activity for them to drop — but you may very well see them slow down," he said of home prices.
He added that speculation about a mortgage rate increase could be driving the current surge in sales.
"All the talk about interest rates going up I think is helping people get into the market sooner rather than later," Mackesey said.
Heithaus called the potential impact of higher interest rates on the housing market "the biggest unknown."
New listings were at their highest May level since 2007, at just more than 6,000, up 8.5 percent from last year. With more than 13,600 properties on the market, this is the 20th consecutive month that listings have increased year-over-year, according to the report.
Meanwhile, the number of days homes sit on the market before a sale ticked up slightly to 32, compared with 30 the year before.
"Once the house goes on the market, buyers are snapping them up," Heithaus said. "Mortgage rates are still affordable, and depending on the region in Baltimore, rents are increasing at a fairly rapid rate and encouraging millennials to get out and buy."
Across the region, prices remained relatively stable, with Baltimore City seeing the largest increase, 9.2 percent to $142,000 in May, compared with $130,000 a year ago. In addition, Baltimore saw a 22.5 percent increase in the number of sales to 719.
The price and sales increases in the city in May came even as the portion of those sales that were foreclosures or short sales declined to 29 percent — still considered high — from 38 percent a year earlier. Across the region, bank-owned inventory makes up about 17 percent of the total listings.
While the region's median home sales price was flat at $250,000, if such distressed sales are backed out, the median price was up 3.2 percent to $289,000 last month from $280,000 in May 2014.
Including all sales, median prices were flat in Harford County at $235,000 and nearly flat in Howard County at $399,900. Prices rose a modest 1.5 percent in Anne Arundel County to $320,000 and 1.4 percent in Carroll County to $289,000. In Baltimore County, the median price was up 3.1 percent to $221,500.
Baltimore-area home prices in May
Median pricechange since last May
Anne Arundel County$320,000+1.5%