Baltimore-area homebuyers picked up the pace in January, pushing sales gains into the double digits and giving the local real estate industry hope that the market is finally on the mend — without the stimulus of federal tax credits that ended last year.
The 17 percent increase in homes sold compared with a year ago marked the first month of rising activity following a post-tax-credit slump, according to numbers released Thursday by Metropolitan Regional Information Systems. The company, which runs the multiple-listing service used to buy and sell homes, revised earlier numbers to show flat sales in December rather than an increase.
"The sales numbers are extremely positive because last year we had a tax credit in effect, and this year we don't," said Kenneth Wenhold, Mid-Atlantic regional director for Metrostudy, which analyzes the housing market for homebuilders. He also noted a rush to nab relatively low mortgage rates: "You had an uptick in interest rates, and that got some people off the sidelines."
That's hopeful news for sellers, but buyers still have the upper hand on price. The average sale price for the metro area fell 5 percent from a year ago, to $253,000.
Market analysts say rising sales are a key step to a more normal market, which has been out of kilter here and across the country for years — first as prices skyrocketed and then after the bubble popped. Home prices can't stabilize until buying activity accelerates enough to correct the years-long imbalance between supply and demand, experts say.
Noah Mumaw, a real estate agent with Yerman, Witman, Gaines & Conklin in Baltimore, said he has seen the increase in activity. Some buyers are taking advantage of low interest rates, worried they will continue to increase. And a number of buyers who are waiting out the market, ignoring overpriced homes, are ready to move fast and make offers when they see a deal, he said.
"There are people waiting to jump," he said. "This has been the busiest January that I've seen in several years."
Of the 1,350 homes that sold last month, 100 went under contract within one to 10 days. By contrast, 150 sold after sitting on the market for more than six months.
The average rate for a fixed 30-year mortgage has been on the rise since falling to 4.2 percent in early November, the lowest on record since mortgage financier Freddie Mac began tracking the trend 40 years ago. This week, the average rate surpassed 5 percent, the highest it's been since April.
Another factor spurring local home sales is the military base realignment and closure effort, known as BRAC, which is relocating out-of-state workers to Aberdeen Proving Ground in Harford County and Fort Meade in Anne Arundel County. Harford sales jumped 55 percent over the year. Sales in Anne Arundel increased 33 percent.
But real estate agents say BRAC is less of a factor in Anne Arundel than Harford. Aberdeen Proving Ground is drawing people from New Jersey, while Fort Meade is gaining workers who had been based in Northern Virginia, within commuting distance.
Laura Roskelly, an agent who focuses on communities near Fort Meade, said January's growth seems to be driven largely by the routine relocation of military families and others who were enticed to move to the area by the lower home prices.
"I think that it's because you can get a decent home under $250,000 again, and it hasn't been that way for a long time in Anne Arundel County," said Roskelly, with Keller Williams Flagship in Millersville.
The rest of the Baltimore region saw smaller increases in sales, or decreases. Home sales rose 16 percent in Baltimore City and 11 percent in Baltimore County while falling 4 percent in Howard County and declining 13 percent in Carroll County.
But there are signs that January wasn't a one-month blip. Newly signed contracts, which will turn into sales if all goes well, rose strongly in every jurisdiction.
Metropolitan Regional Information Systems, which released the numbers, revised figures for December and earlier months as it reconfigured its sales-statistics database for the first time in years. What had initially been reported as an 8 percent gain in December was revised downward to none with new data, the company said.
Foreclosures and other distress sales have helped dampen prices across the region. They also have injected a lot of uncertainty and delays into the buying process.
Lucas and Jodi Kimmel, who were relocating from the New York City area, just closed on a Baltimore County townhouse last week almost a year to the day after they first went under contract — on the house next door.
The first home was a short sale. The seller owed more on the mortgage than the property was worth and needed lenders holding the first and second mortgage to OK a deal. The process dragged on for months, but the Kimmels held on because they liked the neighborhood and the price.
Other home prices in the area, especially for those that weren't distress sales, struck the couple as inflated, with sellers "looking for buyers to more or less cover their losses" from the market decline, said Lucas Kimmel, 29, who works in commercial real estate.
Right after that deal fell apart because the first and second mortgage holders couldn't see eye-to-eye, a foreclosed home next door came on the market. The Kimmels, hoping a bank-owned property would be less hassle than a short sale, made an offer.
But two days before their November settlement date, their title company discovered that financier Fannie Mae didn't actually own the house yet. The couple had already made arrangements to move. Kimmel called it a "bureaucratic nightmare" that meant they had to move in with his wife's parents and put their belongings into storage while the paperwork was straightened out.
"It's a house that we'll be able to enjoy for years to come, and it's in the location that we wanted," said Kimmel, who purchased the property, which has three bedrooms, four bathrooms and a garage, for about $390,000. "It's just going to take a while to get over what we had to go through."
jamie.smith.hopkins@baltsun.com
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