Home prices in the Baltimore metro region continued a slow and steady climb in November, while sales grew sluggish, a seasonal trend exacerbated by economic uncertainty.
Home prices rose just over 4 percent in November compared with the same time last year, according to a Tuesday report by RealEstate Business Intelligence, a subsidiary of MRIS. Prices have been rising at about that rate for almost two years, although the numbers still fall short of the pre-recession peaks.
The median sales price in the Baltimore metro area was $239,450 in November, up from $230,000 in November 2012, but below November 2006's $270,000, according to the RBI data, which are based on listing service information. In Anne Arundel and Carroll counties, the percentage increase rose in the double digits.
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"It's been a reasonable-sized change, but not too huge," said Andres Carbacho-Burgos, a housing economist for Moody's Analytics. "It shows that house prices are starting to recover."
R. Andrew Bauer, a Baltimore-based senior regional economist for the Federal Reserve Bank of Richmond, agreed, adding, "The fundamentals are in place for the housing market to continue to move forward solidly. The question is the pace."
RBI data showed buyer activity slowing during the month, with about 2,000 units sold, down 10 percent from October and flat compared to last year, a seasonal trend that RBI's analysis said was "intensified" by the shutdown of the federal government. The market update, which is compiled with George Mason University's Center for Regional Analysis, predicted a continuation of this trend in the coming months.
Maryland's housing market is particularly vulnerable to uncertainty about government funding, with positions in the public sector or funded through federal contracts accounting for more than 27 percent of the state's total jobs, according to a November study by the Mercatus Institute.
"It's a little bit weird out there," said Dominic Cantalupo of Champion Realty Inc. in Pasadena. "I just think people are still a little squeamish about diving in with both feet."
Uncertainty in the economy makes people concerned about home values and hesitant to buy, particularly when confronted with a small number of desirable properties, said Stephanie Yungmann, an agent with Keller Williams Realty in Baltimore. Inventory remains about 43 percent lower than the July 2008 peak, according to RBI data.
"Anytime there's any sort of a little hiccup in the market, buyers immediately start talking again … about not wanting to make a decision," she said.
For Kathy Broughton and her husband, Tony, it took six weeks and three separate visits to decide to make a $550,000 offer on a four-bedroom colonial in Howard County, even after three years of on-and-off searching and life with two small children in a Canton rowhouse.
Broughton, 34, said the family has been happy with city life, and the search became less urgent as they waited for the value of their home to recover and business to pick up for her husband's contracting company, Broughton Painting and Decorating.
"We thought we'd live here tops three years and that's not really been the case," said Broughton, who used Yungmann as her agent and added, partly in jest, "I think Stephanie hates us."
Analysts said they were not concerned about the sluggish sales, pointing to the strong numbers from earlier in the year.
"More homes closed this November than they did last November, so that's not a drop. The total dollar volume was up, the average price was up, the median price was up," said Ross Mackesey, a sales manager for Long & Foster in Greenspring Valley and Lutherville.
Apart from 2009, when the federal government offered first-time home buyers a tax incentive, "This was the best November since 2006," he said.
Buyers who would have purchased this fall might have done so in the spring in an effort to lock down low interest rates on their mortgages, said Dan Fulton of John Burns Real Estate Consulting in Washington. New, tighter lending rules are also scheduled to go into effect in January.
"Rising interest rates created urgency in the early part of the year and then government shutdown and overall uncertainty about the economy dropped consumer confidence," Fulton said. "The coupling of those two factors, I think, are major reasons why we're seeing slowdown today."