Baltimore-area home buyers picked up the pace in February ahead of the important spring selling season, helped along by unseasonably mild weather.
Real estate agents say they're seeing more activity and hope it's a good sign for spring, rather than simply an early start that will come with an early end. Buyers signed contracts on nearly 2,500 homes in the Baltimore region in February, up 16 percent from a year ago, according to numbers released Monday by Rockville-based Metropolitan Regional Information Systems.
That's the largest number of new contracts for the month since 2007, just before the financial crisis turned a housing slump into a full-fledged crash.
"It feels really busy," said Pat Hiban, with the Pat Hiban Real Estate Group at Keller Williams Crossroads Realty in Columbia. "The weather brings out buyers. … We basically skipped winter."
Contracts are pending deals that generally turn into sales in a month or two — assuming they don't fall apart, which can happen. That makes them a useful but not always reliable measure of where the market is headed. Strong increases in contracts last year did not translate into more done deals.
Still, the number of Baltimore-area homes that sold last month also rose, a 7 percent increase that represented the first significant uptick since last summer. Prices continued their several-year slide, falling about 2 percent on average from a year earlier, to $243,000.
Sellers' experiences ranged considerably across the region. Sales rose more than 20 percent in Carroll County, Baltimore County and Howard County while dropping in both Harford County (down 3 percent) and Baltimore City (down 18 percent). Anne Arundel County was between the extremes with a 7 percent increase.
The drop in the number of foreclosures for sale — a months-long trend, fueled by delays after the robot-signing scandal — is affecting the city's market in particular. Prices soared, up nearly 30 percent, simply because there were fewer sales of cheap homes in bad shape to pull down the average in Baltimore.
But average prices fell everywhere else in the region. Baltimore County, down 16 percent, posted the biggest drop.
Across the metro area, foreclosures accounted for just under 16 percent of all sales in February, according to Metropolitan Regional Information Systems' statistics arm, Real Estate Business Intelligence. That's far less than a year earlier, when they made up 28 percent of sales.
David MacLaine Sr., a former president of the Greater Baltimore Board of Realtors who specializes in bank-owned homes, said he and the agents he talks to believe the number of foreclosures for sale will start increasing again soon — probably by summer.
In the meantime, the bank-owned listings that do hit the market often get a lot of lookers, he said. One he sold recently in Sykesville had seven offers on it, he said. Buyers' agents have taken to contacting him before bringing clients to see a home just to make sure it's not already too late.
"We get those calls all day long," said McIlvaine, based in Ellicott City.
Fewer homeowners trying to sell, in addition to fewer foreclosures on the market, have reduced buyers' choices in recent months. Just under 12,000 homes were for sale in February, down from more than 15,600 a year earlier, as would-be sellers sit on the sidelines because they can't afford to move at today's prices.
More than 60 percent of buyers and prospective buyers — in the Baltimore-Washington area and nationally — identified a lack of good homes for sale as a major concern in a survey by real estate firm Redfin.
Homes just hitting the market are on a modest upswing, at least. Three percent more homes were newly listed for sale in February than a year earlier in the Baltimore region, the first increase since May.
Hiban said the issue for buyers isn't so much an actual lack of homes for sale, but rather that too few of the listings are homes in good condition for a good price. Price is particularly important when it comes to attracting buyer interest, he said.
"It's all about the price," he said.
Keith T. Gumbinger, vice president at HSH.com, a mortgage information company, said the decrease in homes for sale is a nationwide story.
It's not as if more people wouldn't like to sell, though. Stabilizing or rising home prices could bring additional sellers to the fore, Gumbinger said.
He expects mortgage rates, now hovering at about 4 percent for a fixed-rate conforming loan, won't change much during the spring. Low rates were the most common reason cited by Baltimore-Washington buyers when asked by Redfin why they were planning to purchase this year.