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Baltimore home prices rose nearly 7 percent in January

In the depths of winter, Baltimore's housing market is hot.

The median home price in the metro region last month reached $234,950, jumping nearly 7 percent from a year earlier, as foreclosures declined and a crush of buyers competed for homes.

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About 2,195 homes sold in January, up nearly 6 percent from January 2016, according to a monthly report based on data from the MRIS listing service.

Pending sales — which are in process but haven't closed — rose 14.6 percent, according to the report, which was provided by ShowingTime, a firm that provides market statistics to the residential real estate industry.

Experts said first-time homebuyers are back on the hunt as the economy improves and people feel more confident about their jobs. Some, who have been waiting for years, have started families and can't wait any longer.

People who held off before the election are ready to move, perhaps pushed by the possibility of interest rates increasing. An easy winter, without big snows bringing activity to a halt, also helped.

As demand eats into supply, sellers are commanding higher prices, said Andrew Strauch, vice president for product innovation and marketing at MRIS.

"It's definitely ticked up another notch because inventory is so tight," he said.

January was the eleventh month in a row of year-over-year appreciation, after several lackluster years.

Some of the increase was due to fewer distressed sales, which fell 12 percent in the region.

But the gains aren't due to the foreclosure market alone. Standard sales saw their biggest year-over-year gain in more than three years, with the median increasing 5.4 percent from a year ago to $268,750.

The interest is pushing prices higher, allowing sellers, still waiting for their homes to recover value lost during the housing crash, to list homes more comfortably.

"It's a very good sign that the prices are accelerating a little bit and recovering," Strauch said. "Baltimore's definitely recovered much more slowly than D.C., but now it's kind of hitting its own stride."

Sellers have responded to the gains, putting more than 3,600 homes on the market last month — 9.4 percent more than in January 2016. But buyers snapped them up, even in January, typically a slow month for the housing market. Active listings retreated to their lowest January level in a decade.

It took about a month for Mike Williams and his wife to sell their home near Patterson Park last year. He bought the property for about $300,000 in 2006, moved elsewhere and rented it, then moved back in while waiting for the price to recover.

Now parents of 2-year-old, they finally moved to Baltimore County, parting with the home for $250,000.

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"It came back a lot from what I could have sold it for five years ago," said Williams, 37. "We hung onto it. … We didn't want to write a check at settlement."

T. Ross Mackesey said the activity bodes well for spring, but it's not clear if price gains will continue at this pace. More listings should appear in the spring to mitigate the appreciation, but if it's only first-time buyers looking, inventory may remain tight, said T. Ross Mackesey, manager of Long & Foster's Greenspring/Lutherville office.

"I think there is a lot of energy in the market, but what it's going to look like after everything settles down, I'm not sure," he said.

Every jurisdiction in the region saw the appreciation.

In Baltimore City, the least expensive market, the median climbed 14.2 percent year-over-year to $117,000.

Howard County, the most expensive market, saw the median sales price increase 8.2 percent year-over-year, to $367,000.

The median price in Anne Arundel County rose 7 percent year-over-year to $306,000.

In Harford County, the median jumped nearly 9 percent, hitting $234,000.

In Baltimore County, the median price increased 7.5 percent to $215,000.

Carroll County saw the weakest gain, with the median price inching up about 1 percent year-over-year to $272,000.

Mackesey suggested much of the gains are being driven by first-time millennial buyers who put off things as the nation slowly emerged from the last recession.

"I think that marriages were delayed, family formation was delayed, kids, all of that," he said. "That's happening now."

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