By Steve Kilar
The Baltimore Sun
7:08 PM EST, February 11, 2013
For the fourth month in a row, the number of homes sold in the Baltimore area increased at a double-digit rate, rising more than 15 percent in January compared with the same month last year.
In Baltimore and five neighboring counties, sales closed on nearly 1,540 residences last month, about 200 units more than in January 2012, according to data released Monday by RealEstate Business Intelligence LLC, an affiliate of the region’s multiple-listing service. That’s about 200 units short of the 10-year average for January sales.
“January is always the trough month” in terms of the number of homes sold, said Jonathan Hill, RBI’s president. “June is the peak of sales because many people want to get settled before the start of school.”
After years of a stumbling housing recovery, local real estate experts believe the new year’s early numbers may show the beginnings of a normalizing market. Agents are hopeful that as the weather warms, so too will homeowners’ willingness to sell — thereby leveling a supply-demand imbalance born of the recession.
“What we expect to see is February bounces significantly” from January, Hill said, meaning the trend toward sales growth and strong demand, driven in part by low interest rates, will continue. “The market is definitely recovering.”
In Baltimore, the investor market is starting to give way to homeowner buying, said Scott Lederer, general manager of Prudential Homesale YWGC Realty, which recently opened an office on the east side of the Inner Harbor, to help the firm serve the Harbor East and Fells Point neighborhoods.
“We had a tremendous month out of that office,” Lederer said. In January, agents there saw a large number of first-time buyers and great interest in condominiums, he said. “We’ve got a lot of buyers out there looking,” he said.
But there aren’t enough homes available to satisfy those buyers, he said.
RBI’s sales figures bear out that assessment. The inventory of homes on the market is low, as it has been for the past few months.
There were fewer than 9,400 active listings last month, the firm said. That is about 2,800 fewer listings than in January 2012 and is the smallest number for the month of January in eight years, according to RBI’s data.
The small number of homes available may be creating a negative feedback cycle that starts when potential buyers refrain from putting their current home on the market because there are too few options for them to choose from for a new home, Hill said.
“It’s kind of self-defeating,” he said.
Economic uncertainty — particularly as it relates to federal spending — and the current value of homes compared with their bubble value a few years ago also keep people from putting their homes on the market, he said.
“Really, the only thing that’s going to help the market accelerate is an increase in the inventory,” Hill said.
There’s normally a natural increase in listings in the spring, and encouraging signs in January’s data suggest that inventory already already may be expanding.
The number of new listings last month showed an annual increase of 6.2 percent, according to RBI. That brought the number of homes listed in January to just over 3,000 units — nearly 200 homes more than in January 2012. It was the highest year-over-year gain in new listings since early 2011, RBI said.
In the past few months, more homes are being listed each month than in the same month a year ago, said Ryan Price, a research associate at George Mason University’s Center for Regional Analysis, which prepared Monday’s report with RBI.
“It’s happening, but it’s happening slowly,” Price said.
Despite the growth in the number of units sold last month, prices were all but flat in metro Baltimore, RBI’s numbers show, and went down in some jurisdictions.
The median sales price for a home sold in metro Baltimore — the city plus Anne Arundel, Baltimore, Carroll, Harford and Howard counties — last month was $209,250, an increase of just 0.4 percent from January 2012.
Median prices fell more than 12 percent in Baltimore, about 4 percent in Anne Arundel and Howard and 5 percent in Harford. Carroll saw a nearly 18 percent median price gain, and Baltimore County’s grew over 7 percent.
Hill thinks January’s prices reflect increased interest in less expensive units, not decreasing demand. For the first time in three years, for instance, the rate at which townhouses sold exceeded detached homes and condos, RBI said.
Since townhouses are the least expensive form of housing in metro Baltimore, typically more than $100,000 less than a detached home and $25,000 less than a condo, an increase in their sales will drive the overall median sales price down, Hill said.
A lot of first-time homebuyers are looking for homes now, said Taylor Connolly, who manages sales agents in the Baltimore-area market for real estate brokerage Redfin.
“The average sales prices of what people are actually buying is going down a little bit,” Connolly said.
But, he added, overall prices are solid. Homebuyers are no longer finding the steals that were common not long ago, and many are experiencing “sticker shock,” he said. Multiple offers are becoming commonplace in desirable areas, he said.
Agents now scour the listings every morning so they can jump on potentially hot properties, he said, and more buyers seem to be opting to build homes because there’s nothing suitable on the market.
“As long as nothing crazy happens, demand is only going to get higher,” Connolly said. “The biggest concern is where the homes are going to come from to buy.”
|Jurisdiction||Median sales price, Jan. 2013||Percent change, Jan. 2012 compared to Jan. 2013|
|Jurisdiction||Percent change in number of units sold, Jan. 2012 compared to Jan. 2013|
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