Although the real estate market typically slows as the weather cools, the number of Baltimore-area residents buying houses continued to rise in November, researchers reported Thursday.
Carroll County had a 1.9 percent increase, year over year, in median sales price to $269,900, along with a 9.5 percent increase in the number of sales to 150.
Some believe that the widespread expectation that the Federal Reserve will soon raise a key interest rate — which would push up mortgage rates — has spurred home sales among buyers who want to lock in lower rates while they're still available.
The impact of a looming rate increase is "definitely psychological," said John L. Heithaus, vice president of sales for RealEstate Business Intelligence. RBI is part of the research firm Metropolitan Regional Information Systems, the region's multiple listing service, which put out the report.
"A rise of mortgage rates of 1 or 2 percent, it's more psychological because it's not a big increase in the payment, but once people get the ball rolling, they want to be on the right side of it," Heithaus said.
"It's psychological for sellers, too, saying, 'Well, if buyers are going to dry up, then I better get in there.'"
Closings in November were up more than 10 percent to 2,373 across the Baltimore region, year over year. New listings were up 16.5 percent, and pending sales were up more than 9 percent.
Typically, sales slow in the fall and winter and rise again in the spring and summer. Sales in the region did drop 20 percent from October to November, but it was still the strongest November since 2009, and the strongest for pending contracts in more than a decade.
The region's median sales price was flat, continuing a months-long trend. Realtors blame the high share of bank-owned real estate and short sales.
Federal Reserve Chair Janet Yellen told Congress last week that if there are no major shocks to undermine confidence, economic conditions appear to be improving enough for policymakers to raise interest rates when they meet next week.
Yellen said the Fed expects to raise rates gradually to keep borrowing costs low for consumers and businesses.
The Fed's key short-term rate has been at a record low near zero for the past seven years. Fed policymakers are scheduled to meet Tuesday and Wednesday.
Some said any hike would have only a modest impact on short-term adjustable rate mortgages, and little to no impact on more common 30-year fixed-rate mortgages.
Alessandro Rebucci, an assistant professor at the Johns Hopkins Carey Business School, said the rates on 30-year fixed-rate mortgages could go down as the U.S. economy outperforms those of Europe and other places. If the number of people who snap up U.S. Treasury bonds rises, he said, mortgage rates could drop.
"At the end of the day, the U.S. economy is doing better than the rest of the world, and the rest of the world wants to come here and take advantage of a good opportunity," Rebucci said. "It could be positive in that it could have the paradoxical effect."
Some predicted that the surge in buying and selling activity would continue in the near future.
"I would expect you will probably see a huge amount of activity of people trying to get into a low mortgage or refinance before the next round of increases go up," said Daraius Irani, chief economist at the Regional Economic and Studies Institute at Towson University.
If interest rates rose, he said, it would have a modest impact on sales prices and could knock a small number of potential buyers out of the market.
"Instead of full asking price you might get 94 percent," Irani said. "Obviously it's going to affect the monthly mortgage payment. They might not make the cut, people on the cusp of 'Can they afford it, can they not afford it?'"
Gail Feirstein, a broker associate with Coldwell Banker in Annapolis, said her office met Thursday morning to discuss the potential rise in mortgage rates and what it would mean for the business.
Because the interest rate rise is expected to be small — perhaps a quarter of a percentage point — Feirstein doesn't anticipate any significant impact to the market. While the buyers she is working with now are "very conscious" of the fact that interest rates could rise, she said "they're most focused on finding the right property."
When Feirstein got into the real estate business in the early 1980s, she said, mortgage interest rates were as high as 18 percent.
"People have gotten very spoiled in recent years of having these historically low interest rates," she said. "Buyers are certainly sensitive to interest rates, but if there is a little peak in interest rates it won't halt the market overall. But it may be a setback as buyers get used to the fact that interest rates of 3 percent won't be around again."
The trend of flat prices amid rising sales has held steady for most of the year. The median sales price for the region was $230,000, down $5,000 from October, but the same as November 2014.
Foreclosure sales and short sales made up made up more than 22 percent of all closings across the region, which drives down the median price. The median sales price for foreclosures was $105,810, and the median sales price for short sales was $165,000. The median price of nondistressed properties was $265,000.
As the distressed properties are sold, said Ross Mackesey, past president of the Greater Baltimore Board of Realtors, prices next year will be back at the 2006 peak of the real estate market.
Mackesey said the talk of rising interest rates "gets people thinking" about buying now rather than later.
Still, he said, "Most of the conversation you hear about the Fed raising rates and you got to buy houses now is somewhat hype," and might not have a significant impact on the market next spring.
"I think it's more important to tell potential buyers that the economy is heating up," Mackesey said.
He attributed some of the rise in sales to first-time homebuyers.
"First-time buyers who do not have children are looking to spend year-end bonuses and the like," he said.
Heithaus agreed that first-time homebuyers were a major factor in the surge in sales. The market typically peaks in the spring and summer as families with children try to time their moves over the summer break. Many first-time buyers don't have schoolchildren and aren't bound by those timelines.
FHA-insured mortgages, which are only available to first-time homebuyers, are on the rise, Heithaus said. Sales of lower-priced townhouses are also up, also indicating more first-time buyers.
"I was trying to understand, besides the interest rate situation, why people were buying houses in December," Heithaus said. "We're seeing buyers that don't have kids, especially millennials, and they're not as date-sensitive as other buyers have been.
He added: "It's going to take a big rise in rates to get people seriously disturbed."
The Associated Press contributed to this article.