New-home sales in the Baltimore area hit a 10-year high last year, as low mortgage rates and renewed confidence in the economy kept the homebuilders' recovery going.
Sales reached 10,412, up 8 percent from 1992, according to the Legg Mason Realty Group in Baltimore.
The total was the highest figure since the company started tracking new-home sales in 1985.
"This is a sign to us of a good, healthy market," said Robert M. Lefenfeld, a Legg Mason senior vice president.
The top-selling community was the Odenton-Crofton area of Anne Arundel County.
Second in sales was the Owings Mills area of Baltimore County, and third was the Edgewood-Joppa market, also in Baltimore County.
Much of the rise in new home sales occurred during the fourth quarter, Mr. Lefenfeld said. For the quarter, sales rose to 2,311, up 37 percent from the same quarter in 1992.
The surge was led by first-time buyers, most of whom bought condominiums valued at about $75,000, or townhouses in the $100,000 to $125,000 range, Mr. Lefenfeld said.
"A lot of these buyers are on the edge financially. But the builders learn to work with them," he said, noting that first-timers are "bread-and-butter" buyers for such large builders as the Ryland Group and Washington Homes.
Another strong segment involved move-up purchasers buying relatively small detached homes priced in the range of $150,000 to $175,000.
A weak segment, however, involved "move-down" buyers, such as empty-nesters, who typically down-scale to a townhouse or condominium after their children are grown.
Paced by higher lumber costs, the median base price of a detached home sold in the Baltimore region rose last year by $15,900, and a townhouse by $3,000.
Still, the median condominium sold during the year dropped in price by $2,800.
And the median cost of a detached house fell during the fourth quarter -- down $2,500 to $203,621 -- as more affordable subdivisions in Howard and Carroll counties were introduced.
Mr. Lefenfeld expects a strong 1994:
"Despite the recent uptick in interest rates and abysmal winter weather, we believe the 1994 new-homes market will continue to improve."
Even so, he does not expect that the Baltimore new-home industry will resume the frantic pace of construction during the early 1970s, "when things were going bonkers," Mr. Lefenfeld said.
"The age of 'Build it, and they shall buy' has passed," the Legg Mason executive said.
He noted that the volume of speculative building has steadily diminished during the last decade. These days, most builders put up a house only after a contract has been obtained from a buyer.
During the economic downturn of 1981, "builders found themselves caught with tremendous carrying costs" after mortgage rates spiked and large parts of their subdivisions stood unsold.
Since then, the number of homes built has more closely tracked the number of sales contracts obtained, Mr. Lefenfeld said.
The Legg Mason Realty Group offers research, appraisal and information services to the real estate industry.
Its "Housing Market Profiles" track new-home sales in subdivisions of 20 or more units in Baltimore City as well as Anne Arundel, Baltimore, Carroll, Harford and Howard counties.