And while prices remain below their housing-bubble highs, they are rising again. The average sale price in the Baltimore region rose 9 percent in June compared with a year earlier, the fourth month in a row of gains, Rockville-based RealEstate Business Intelligence said Tuesday.
It boils down to a bit more demand and a lot less supply. Sales have risen year-over-year for the past five months while the number of homes for sale is down more than 25 percent.
As a result, the supply in June — how many months it would take to find buyers for everything on the market at the current pace of sales — dropped under five for the first time since the summer of 2006. That is seller's market territory, though real estate agents are warning that buyers are a lot warier of overpaying than the last time that happened.
"If the seller's property is priced right and in good condition, it will sell — and it will sell quickly," said Cindy Ariosa, senior vice president for Long & Foster's Baltimore and Western Maryland region, which is seeing multiple offers on some homes. "Overzealous sellers that still are trying to go back to 2006 prices, those are the ones that are staying on the market."
The region's average price in June was about $303,000, $18,000 less than in June 2006 — and $34,000 less than in June 2007, early in the financial crisis. Baltimore and its five surrounding counties make up the region.
Whether the new, post-bust housing market is all up from here hinges in part on the outcome for struggling borrowers.
After the robo-signing scandal that exposed mortgage-servicing abuses nationwide in late 2010, banks hit the brakes on foreclosures. Sales of bank-owned homes were down 44 percent in June from a year earlier, a 12-month streak of double-digit drops.
But mortgage delinquencies remain high. And though housing counselors hope this year's nationwide settlement with the five largest mortgage servers will mean more loan modifications and other help, the foreclosure apparatus is gathering speed again.
In Baltimore City, mortgage servicers started nearly 1,500 foreclosure cases during the first half of the year, according to the Baltimore Neighborhood Indicators Alliance. The number remains far below the peak in 2010 but is up more than 70 percent from the first half of last year.
About 48,000 homes with delinquent mortgages in the Baltimore metro area aren't yet on the market but are likely to end up there as foreclosures or short sales, according to estimates from John Burns Real Estate Consulting. The California firm, which analyzes the housing market for builders, said that equates to a nearly two-year supply if the sales pace over the last 12 months continues.
But banks won't dump this "shadow inventory" on the market all at once, said Sean Fergus, the firm's manager of research. And a huge appetite for rentals has companies hunting for foreclosures to buy and rent out, he said.
"There's plenty of money ready to acquire," Fergus said.
Despite an 8 percent increase over the year, the number of Baltimore-area homes sold in June remains low. About 2,570 homes changed hands, compared with an average of about 3,500 over the past decade.
The big drop in homes for sale is the reason buyers have fewer choices now. Supply is especially tight in some areas — Howard County for one — and that includes homes in lousy condition or priced too high.
"There's a lot of not appealing homes on the market," said Cathy Werner, broker of ReMax American Dream, which has offices in Perry Hall and Bel Air. "If you have a buyer who's looking for a specific property at a specific price, the inventory is low."
She sold a home in Bel Air last month that got five offers in less than two weeks. Some of the contracts had "escalation" clauses to up the price in the event of competition. "It was listed at $380 [thousand] and we got $385," Werner said.