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baltimoresun.com

Harford housing market making a slow comeback

BY DAVID ANDERSON, daanderson@baltsun.com

9:05 AM EDT, March 20, 2013

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While homes continue to be built around Harford County, the market has a long way to go before it gets to the heights it sustained before the nationwide housing market crash began in 2007.

"In general, we are tracking equal to, or slightly above the national numbers," Jim Richardson, director of the county's Office of Economic Development, said Tuesday.

Richardson referred to reports of the housing market across the country showing signs of a rebirth in recent months, especially in the area of single-family detached homes.

The U.S. Commerce Department reported Tuesday that 946,000 new home permits were issued across the United States in February, the highest number since June 2008, according to Bloomberg.com.

Data provided by Harford County's permit office indicated a significant jump in the number of permits approved for single-family dwellings in 2012, from 240 permits issued last year, compared to 176 in 2011 and 142 in 2010.

A total of 450 residential building permits were issued by the county in 2012 for modular homes, townhouses, apartments and condos.

The data showed 543 residential permits were issued in 2011, and 376 in 2010.

Demand returning

"In general, we have a very favorable loan market," Richardson said. "The cost of money is very reasonable and the demand has started to come back to the county."

He cautioned that it is more difficult for prospective home buyers to obtain a loan, as the federal government and banks have tightened regulations for lending.

Interest rates, however, have reached a historic low.

Richardson also noted houses are not staying on the market as long as they did a five years ago at the start of the housing crisis.

"We were looking at a year and six months (in 2007 and 2008) that it took to sell a house, and now we are down to less than six months," he explained.

Richardson said "the other good news story about the increase in single-family home permits is the fact that we have also absorbed the excess number of homes that existed after 2005."

The housing boom that swept the nation during the 1990s and early part of the 2000s hit its peak in Harford County in 2005. At that time, the county was approving about 2,000 residential permits per year, according to local officials.

"From the '80s to the '90s to the early part of the 2000s we were averaging 1,800 to 2,000 permits a year," Pete Gutwald, director of Harford County's Department of Planning and Zoning, said.

Thirty-nine subdivisions were under construction throughout Harford County's development envelope as of the end of 2012, according to data on Planning and Zoning's website.

County officials had approved 5,901 single-family, townhouse and apartment/condo units, and building permits had been issued for 1,477 of those lots.

Greater Bel Air, HdG active

Gutwald said much of the development has been concentrated on the outskirts of Bel Air and in the area of Havre de Grace.

A map on the Planning and Zoning website showed many subdivisions being built near the Bel Air town limits, along the Route 24 corridor and along the I-95 and Route 40 corridors in the Joppa and Edgewood areas.

Gutwald said many single-family homes have also been built in ones and twos around the county, many in outlying areas.

"There's constantly a number of single-family [homes] that are generated throughout the county," he said. "It's not any one given area."

The planning director cautioned that the current numbers did not so much indicate an upswing, but "a stabilizing in the economy."

The county's three municipalities issue their own residential building permits. Havre de Grace has seen a great deal of residential growth in recent years with the development of the Bulle Rock and Greenway Farms subdivisions along Route 155 and Route 40.

Development of Bulle Rock, which is a mix of single-family homes, townhouses, condos and duplexes, and Greenway Farms, which is only townhomes, began in 2005, said Neal Mills, the city's planning director.

Bulle Rock consists of 2,126 lots and 961 had been built on as of August 2012, Mills said. Greenway Farms was approved for 690 lots, and 153 units had been built as of last August.

"If you look at our data, it's safe to say that about two thirds of the building permits issued are Bulle Rock and the other third is Greenway Farms, across the board from [Fiscal Year] 2010, 2011, 2012 and the first six months of 2013," Mills said.

Permit data provided by Mills indicated 87 permits were approved during the 2012 fiscal year, with 36 for single-family detached homes – meaning homes surrounded by yards and not attached to other houses – 51 for townhomes, and none for duplexes and condos.

Sixty-five permits were issued in the 2011 fiscal year, with 41 for single family, 23 for townhomes, one for a duplex and none for condos.

There were 169 permits issued in FY 2010, with 83 going for single-family dwellings and 86 for townhomes. No duplex or condo permits were issued.

"It's my opinion that the Fiscal Year 2010 numbers were inflated because of people taking advantage of the first-time homeowner tax credit offered by the federal government," Mills said.

Mills noted the tax credit, which was offered as a temporary stimulus to encourage Americans to buy homes and bolster an economy which was still melting down at the time, expired in the spring of 2010, toward the end of the city's fiscal year.

He said 19 permits were issued from July 1 to Dec. 31, 2012, the first half of the current fiscal year, compared to 40 for the first six months of 2011.

In the first half of 2012, 13 permits were for single-family homes and six were for townhouses. Fifteen were issued for single family and 25 for townhouses in the first half of FY 2011.

Mills said the city typically issued about 100 residential building permits per year prior to the economic crash.

"We're roughly about 75 percent below what we should be, so I'd say we were comparable to the county," he said.

More eager buyers

Michael Euler Sr., a developer from Fallston said he has remained busy building homes in the Bel Air vicinity despite the housing slump.

He is overseeing home building in the 129-lot Blake's Legacy subdivision, on land formerly farmed by the Blake family, who selected Euler and his late business partner Joe Deigert to develop the property.

Euler said about 20 lots have been sold so far, "and the model [home] is not even open, which is the incredible part."

The subdivision is off Red Pump Road and Grafton Shop Road in the Bel Air North area.

"The market in the Bel Air area has been not been hurt as bad as some areas because of proximity to good schools, decent shopping and good neighborhoods where everybody wants to live," said Euler, whose Richardson's Legacy off Tollgate Road, south of Bel Air, has also seen brisk single family home sales for three years.

Joan Ryder, owner/broker with Joan Ryder and Associates Real Estate Inc. of Bel Air, said people are eager to buy a home in Harford County, but supply is not keeping up with demand.

"We're looking for more listings, and trying to build up our inventory because the market is demanding it and there's not much out there," she said.

Ryder said homes which are "in good condition and priced right" sell quickly – she said one house sold less than a week after it was listed.

Most of the current supply of existing homes is made up of foreclosed homes owned by banks, or those which owners are trying to move through a "short sale," which involves an owner selling a home for less than what he or she owes on the mortgage.

Ryder said short sellers must get approval from their mortgage lenders, and it can take six to eight months to sell a house using that process.

She said her firm typically sells about 25 homes a month, and was selling about twice that amount at the height of the housing boom.

Ryder said the National Association of Realtors, however, is "predicting really good things for 2013."

"It looking like it's turning around," she said. "I don't think it's going to be like it was five years ago, but at least getting back to a reasonably normal market."