The pace of homes sales in the Baltimore region rebounded last year to nearly its pre-crash peak, but home prices remained restrained and don't look to pick up any time soon.
The lack of growth in home prices is bucking national trends, with the metro area's median price still hovering around $240,000 for the third year in a row, according to a report released Wednesday by RealEstate Business Intelligence, a subsidiary of the MRIS multiple list service.
Only Howard and Harford counties experienced price increases, in both cases by less than 2 percent.
People in the business of selling homes said high numbers of distressed properties — about 23 percent of the 2015 sales — acted as a drag on numbers across the region. During 2015, the number of distressed sales increased nearly 37 percent to 8,132 transactions, according to RBI data.
Even so, John Heithaus, who analyzes the data for RBI, said it was the rate of activity that defined 2015, making it a "banner year" for the local housing market. It's one that may not be repeated, he said, amid uncertainty about the global economy, the presidential election and interest rates, which are likely to rise this year.
"We're going into a different year," he said. "Let's call 2016 our wait-and-see year."
Nearly 36,000 homes sold in Baltimore City and the five surrounding counties last year, up 18.8 percent from 2014, RBI reported. The total number of transactions was about 5 percent off the 2006 peak, it said.
Foreclosures buoyed those numbers, but closed sales of non-distressed properties also rose about 14.4 percent, according to RBI. The median sales price for non-distressed properties inched up 1.1 percent to $277,000, RBI said.
T. Ross Mackesey, past president of the Greater Baltimore Board of Realtors, said activity picked up as the rate of job creation increased and people began to feel more secure in their jobs.
But demand for less expensive starter homes is stronger than it is for top-priced houses, which weighed down the averages in 2015, he said.
"One of the things that we are seeing, particularly with the millennials that have come into the market, is that they're more conservative," he said. "They're not necessarily finding out the maximum they can mortgage and then trying to find the house."
Baltimore County was the most active market in the metro region last year, with nearly 10,000 sales, RBI said. However, the county's median price fell 2.3 percent to $210,000 in 2015, as the number of distressed sales passed 2,300, up 44 percent for the year.
Low levels of appreciation match a lack of broader inflation in the economy, Heithaus said. It's not clear how many more foreclosures still need to be processed, which will shape the local market this year, he added.
"The sales velocity is more important to me than prices," he said. "Those things don't happen unless there's really strong buyer demand for real estate."
Mackesey said he expects the activity to continue in 2016, as Maryland's economy — which is less affected by market cycles than many other parts of the U.S. — continues to improve and more first-time homebuyers get in the game, propelled in part by the expectation of further interest rate increases.
"Certainly when interest rates are going up, it creates urgency," he said.
The Federal Reserve increased a benchmark interest rate for the first time since 2008 last month, at the same time signaling plans for further increases this year.
The increase was small — a quarter of one percentage point — and rates are likely to remain low relative to historic numbers, limiting their impact on the market, said Robert Frazier, area sales manager for Long & Foster's Prosperity Home Mortgage. But he said expectations of rising rates will have an effect, reducing refinancing and convincing on-the-fence buyers to go forward.
"When the Fed makes a move … you will see increasing sales almost immediately," Frazier said. "We had a much busier December because of it and are also having a pretty good January because of it."
There were 3,043 home sales in December, an 11 percent increase from the same period in 2014, which also saw an end-of-year jump, according to RBI data. That was the highest number of homes sold in December since 2005.
Marney Kirk, a real estate agent with Keller Williams Excellence, said November and December were some of the best in her 17 years in the business.
"It was wild," she said.
Kirk, who works mostly in Baltimore city and county, said her December spike came from a mix of buyers in different price ranges. In addition to interest rates, unseasonably warm weather and changes to the closing process that have slowed it down might have contributed to the broader activity, she said.
"I couldn't really put my finger on exactly what was happening," she said. "I think people are just maybe becoming a little more confident about putting their feet back into the market."
In Anne Arundel County, the median sales price for 2015 dipped 1.9 percent to $307,000. In December, the median slipped 4.4 percent to $295,500.
In Baltimore City, last year's median sales price fell 4.3 percent to $110,000. It was $120,000 in December, up 50 percent compared to the same period in 2014 when distressed properties flooded the market.
December's median sales price in Baltimore County was $212,000, up 1 percent from a year earlier.
In Carroll County, the median sales price slipped 1.1 percent, to $280,000 last year. It was $255,600 last month, down 12.5 percent from December 2014.
In Howard County, the priciest of Baltimore's suburbs, the median last year bumped up 1.4 percent to $397,000. It was $380,000 in December, up less than 1 percent.
Harford County posted a 2015 median of $235,000, up 1.3 percent from 2014. In December, the median was up less than 1 percent to $230,500.