Analysis: Unrest in Baltimore might be affecting home sales

Fewer home buyers may be interested in Baltimore after the unrest, a new analysis says.

Home sales across the Baltimore region are at the highest they've been since before the housing market crash, but the civil unrest may have dampened demand in Baltimore City, according to a new analysis.

While many markers of the city's real estate market were healthy, the number of new contracts in Baltimore rose just 7.5 percent in June over the year before, compared to a 19.7 percent rise across the region, according to the report released Friday by RealEstate Business Intelligence, a subsidiary of Rockville-based Metropolitan Regional Information Systems.

The authors blamed the civil unrest in the city that was broadcast live around the world in April.

The housing market "appears to be experiencing impacts" of the riots, arson and looting that followed the death of Freddie Gray, they wrote.

But John L. Heithaus, vice president of sales for RealEstate Business Intelligence, cautioned against drawing conclusions from the data. Other markers of the city's real estate market health are strong, he said.

"You're really comparing apples to oranges," he said. "If you look at the Baltimore City activity in June and the last five years, when you compare the market against itself, it's painting a very good picture."

He added: "You can't have national news like that without impacting the real estate market, but statistically it just doesn't show when you compare the market against itself."

Across the region, home sales increased by double digits for the seventh month in a row, with a year-over-year increase of 22.8 percent and up nearly 20 percent over May. The 3,873 properties sold in June were the most for that month since 2006.

After new contracts hit 10-year highs in April and May, they declined by about 6 percent compared to the month before. Still, at more than 4,000 new contracts, it was the third-highest number since June 2005.

The MRIS analysts expressed concern with the number of new contracts in Baltimore, calling it a "notable shift" when compared to the rest of the region and pointing out that it followed the civil unrest.

Before April, the report's authors said, Baltimore's gains in new contracts were comparable to or exceeded those of the rest of the region.

Ross Mackesey, the president of the Greater Baltimore Board of Realtors, said he has not seen that trend. He said the civil unrest does not appear to have made a difference in the Baltimore housing market.

He said millennial first-time buyers are snapping up houses in Baltimore.

"A lot of them are young professionals who live in those gentrified neighborhoods in the city and have been renting there," he said. "It appears as though the Inner Harbor neighborhoods in the city didn't miss a beat."

Baltimore Mayor Stephanie Rawlings-Blake has set a goal of luring 10,000 new families to the city in the next decade, but the population has remained relatively stagnant.

Officials at Live Baltimore, which offers a $5,000 down payment or closing cost incentives to buyers, said it was not unusual for the city's gains to lag behind the rest of the region.

Annie Milli, the organization's marketing director, said some buyers were expressing interest in "how they can be part of the solution" in Baltimore.

"I think we're just focused on the units sold and the days on market numbers, and we feel like they're strong," she said.

Across the region, active listings were up 6.5 percent to 5,493, the highest June level since 2007. The median sales prices in the region was mixed, dropping 3 percent to $259,900 compared to June last year, but up 4 percent over last month. The only area where the median price increased compared to the year before was Howard County, where it rose about $20,000 to $420,000.

Sales of distressed properties jumped nearly 65 percent compared to last year to 675, which the report's authors said was holding overall prices down. The median sales price for foreclosures was $96,500, The median sales price for non-distressed properties of $289,000.

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