Although most local homebuilders saw a drop in sales last year as a result of the economic downturn that hit Maryland, the town house market proved to be the most resilient to the sales slump.
New town houses outsold new detached houses in the Baltimore area last year -- the first time that's happened since analysts at the Legg Mason Realty Group began monitoring sales in 1985. That's a sign that many buyers in the market during the downturn were seeking affordable, "entry-level" housing rather than more luxurious "move-up" housing.
"Everything was down, but town houses were down the least," said Robert Lefenfeld, vice president of information services for Legg Mason Realty.
"The heart of the market is below $200,000," said Jerry Doctrow, vice president for research services. "What gets hurt most in a recession is the upper end."
Other findings of Legg Mason's quarterly Housing Market Profiles report: New home prices either remained steady or fell slightly in almost all parts of the region. Although the sales pace deteriorated, builders continued to open new projects. And the two top-selling homebuilders remained Ryland Homes and Ryan Homes.
Statistics compiled by Legg Mason showed that 1989 was the first year that traditional, suburban single-family detached houses did not account for at least 50 percent of all new home sales in the Baltimore market. But 1990 was the first year that the volume of town house sales exceeded the volume of detached house sales.
According to the latest Legg Mason report, 3,431 town houses were sold in 1990 for a 42 percent share of new home sales, 3,136 detached homes were sold for a 38 percent share and 1,665 condominiums were sold for a 20 percent share.
In the fourth quarter of 1990, town houses made up 46 percent of the new home sales, while detached homes accounted for 37 percent of the sales and condominiums accounted for 17 percent.
In 1989, by contrast, 3,848 detached homes were sold for a 39 percent share of the market, compared with 3,821 town houses sold for a 38.8 percent share of the market. Condominium sales accounted for the remaining 22 percent.
"Long-term demographic trends point to a de-emphasis on town houses as the baby boomers mature and move up into larger detached homes," Mr. Lefenfeld said. "However, in the short term, the larger inventory of affordable products . . . allowed the town house market to sustain the uncertain economic climate better than the more expensive detached market and the limited multifamily market."
Sales trends largely reflected the kind of people still in the market for new houses when the recession hit Baltimore in the second half of 1990, Mr. Lefenfeld noted.
Many buyers in 1990 were young singles or couples moving out of rented apartments or their parents' houses and becoming homeowners for the first time, he said. Meanwhile, move-up buyers who would typically be purchasing more expensive detached houses hesitated to make a move as a result of the recession and the Persian Gulf crisis.
"Affordable products were able to find a stronger market for 1990 because they were catering to a market niche that wanted to move into homeownership and was able to see beyond the economic downturn," he said. "It's the town house as an entry-level product that was really leading the charge. It's the affordable option for becoming a homeowner."
Legg Mason Realty Group is one of the few companies in the area that studies the market to monitor demographic trends and other changes that affect homebuyers and builders. Figures for 1990 are based on information compiled by Housing Market Profiles project director Kate Weglein, with sales statistics supplied by the builders themselves.
The study includes all active for-sale residential properties in subdivisions of 20 or more units, in Baltimore City and in Anne Arundel, Howard, Carroll, Baltimore and Harford counties. It does not reflect construction and leasing of apartments.
Legg Mason's companion list of the 20 top-selling subdivisions reflects sales of active "conventional" subdivisions in which houses are built and sold without federal subsidies.
Legg Mason's study showed that 8,232 new homes were sold in 1990, a 16 percent decrease from the 9,836 new homes sold in 1989. Sales were down in all counties except Anne Arundel.
Although the sales pace slowed in 1990, builders continued to open new projects. According to Legg Mason, 207 new projects opened during the year and 132 projects sold out or were closed, giving the region a net gain of 75 projects.
Twenty-five percent of the new projects that opened in the area in 1990 were in Anne Arundel County, mostly in the Odenton-Crofton area. With the help of those projects, Legg Mason said, that region's sales increased from 1989 to 1990.
Other strong markets included Northwest Baltimore and the Edgewood-Joppa region of Harford County. Sales fell significantly in Howard County and the Bel Air-Fallston area.
According to Legg Mason Realty, the 10 best-selling areas during 1990 were Edgewood/Joppa, with 987 sales; Bel Air/Fallston, 693; Ellicott City, 399; Crofton, 369; Reisterstown/Owings Mills, 354; Elkridge, 352; Perry Hall/White Marsh, 348; Pikesville, 308; Columbia, 269 and Odenton, 252.
The best-selling houses in 1990 were Ryland Homes' Kings Woods town houses in Laurel, which went on the market in September. Forty-seven houses were sold there, with an average base price of $112,667.
Other top-selling communities were: English Country Manor in Bel Air by Terminus Corp.; Rainflower in Sparks-Glencoe by Hendersen-Webb; Kings Ransom in Odenton by Washington Homes; Cromwell Fountain in Glen Burnie by FJS Builders; Montgomery Run in Ellicott City by Macks Homes; Waterford Landing in Essex by Hendersen-Webb; Pembrooke in Elkridge by Ryan Homes; Fields at Hampstead in Hampstead by Masonry Contractors; and Carrollwood Manor in Middle River by Washington Homes.
The Enterprise Foundation's Nehemiah housing project in the Penn-North and Sandtown-Winchester neighborhoods actually sold better than any other development, with a monthly sales pace of 21.11, or nearly twice the pace of Ryland's Kings Woods project, Legg Mason said in its report.
But it noted that the project is being built with money from the Nehemiah program of the U. S. Department of Housing and Urban Development, among others, and that sales are restricted to buyers who meet certain income and eligibility requirements.
Ryland and Ryan remained the top-selling homebuilders in the Baltimore area, according to Legg Mason Realty. The Housing ** Market Profiles report said Ryland sold 949 homes in the Baltimore area, while Ryan sold 712.
Ryland's figures represented 11.5 percent of the total home sales market in the area, and Ryan's figures represented 8.6 percent. Ryland has led the list for the six years that Legg Mason has been compiling it.
Rounding out the top five in the Baltimore market were: Hendersen-Webb, with 342 sales for a 4.2 percent market share; Washington Homes, with 330 sales for a 4.0 percent share; and Winchester Homes, with 235 sales for a 2.9 percent share.
In sixth place was Macks Homes, with 231 sales for a 2.8 percent share; followed by Pulte Homes, with 192 sales for a 2.3 percent share; NV Homes, with 173 sales for a 2.1 percent share; Masonry Contractors, with 166 sales for a 2.0 percent share; and Sterling Homes, with 152 sales for a 1.8 percent share.
The report also showed that new home prices either remained steady or fell slightly in almost all parts of the region. Overall, the median base price for a new home in the Baltimore region fell 1 percent, to $166,950, from the third quarter to the fourth quarter, according to Legg Mason.
The median base price for a new or existing home sold in the Baltimore region fell 2 percent, from $126,850 in 1989 to $124,900 in 1990.
As of January 1, 1991, the median base prices for new detached houses and town houses had fallen 2 percent, to $193,609 and $118,233 respectively, compared with median prices at the end of the third quarter of 1990, according to Legg Mason.
Mr. Lefenfeld and Mr. Doctrow noted that many builders "fine-tuned" their projects last year, in many cases offering less expensive "stripped-down" models that could be upgraded with options.
During the fourth quarter, they said, 18 percent of the active projects introduced new models and 27 percent of the detached communities introduced new models -- half of which were lower-priced and smaller than what had previously been offered at that development.
As a result of such adjustments, Mr. Doctrow said, "you can get a house in a desirable neighborhood for absolutely less money than before."
Sales by builder
Percent sales shows proportion of total sales in study area.
3). . . . . . . . . . . . . . . . .. % of
Builder. .. . . . . . Sales. . . sales
1. Ryland Homes. . . . 949. . . . .11.5
2. Ryan Homes. . . . . 712. . . . . 8.6
3. Hendersen-Webb. . . 342. . . . . 4.2
4. Washington Homes. . 330. . . . . 4.0
5. Winchester Homes. . 235. . . . . 2.9
6. Macks Homes. . . . .231. . . . . 2.8
7. Pulte Homes. . . . 192. . . . . 2.3
8. NV Homes. . . . . . 173. . . . . 2.1
9. Masonry Contractors 166. . . . . 2.0
10. Sterling Homes. . .152. . . . . 1.8
11. Trafalgar House. . 145. . . . . 1.8
12. Landmark Homes. . .136. . . . . 1.7
13. Diversified Homes. 134. . . . . 1.6
14. Keystone Homes. . 125. . . . . 1.5
15. Columbia Builders..121. . . . . 1.5
Total sales for study area 8,232
SOURCE: Legg Mason Realty Group Inc. Housing Market Profiles, Baltimore Regional Council of Governments, Building Permit Data System