Home sales in the Baltimore region continued a nine-month slide in March, though sales fell less precipitously than in recent months, the Greater Baltimore Board of Realtors said yesterday.
Sales of new and existing homes in Baltimore City and Baltimore, Howard, Harford and Carroll counties dropped 16 percent, to 1,156, compared with 1,370 homes sold in March 1994, the board said. Sales had been off by 24 percent in both January and February.
Contract signings, a measure of settled sales anticipated for the coming months, dropped 10 percent in March, from 1,951 last March to 1,749. The average sales price remained stable, at $129,139, the board said.
Though mortgage rates have begun to stabilize, many in the industry believe the market still feels the pinch of a rate increase of nearly two percentage points over the past year.
The average rate on a 30-year, fixed mortgage had climbed above 9 percent in September after bottoming out at 6.83 percent in October 1993. Rates in the Baltimore area have eased recently. Last week, 30-year, fixed mortgage rates averaged 8.62 percent.
Rate increases have meant less purchasing power for buyers, said Bill Teal, branch manager for Norwest Mortgage Inc. in Lutherville.
"People looking to purchase [a home] last year for $100,000 are now back down to $85,000, and those who were at $120,000 are now back at $100,000," he said.
But "with rates moving south again, people are able to afford a little more," he added.
To offset rate increases and boost business, lenders are pushing "buy-down" loans, in which a buyer still can get an initial rate of 7 percent in return for paying an above-market rate in the future, Mr. Teal said.
For instance, he said, Norwest offers loans with slightly higher than market rates, in which the borrower might pay 7 percent the first year and 8 percent the second before the loan adjusts to its maximum 9.25 percent in the third year.
Phil Goldsmith, an agent with O'Conor, Piper & Flynn in Owings Mills, said such programs have made it possible for many of his first-time buyer clients to purchase homes.
The board reported sales drops in the city and all four counties ranging from a 4 percent decline in the city to a 28 percent drop in Carroll County.
But the number of contract signings rose 20 percent in the city in March.
That shows "there is still a strong demand for residential real estate in this economy," said Christine Vasiliou, executive vice president of the Board of Realtors.