Baltimore-area home sales for May had a slight 2 percent drop from the same period a year ago, but pending contracts -- an indication of future activity -- dropped significantly, leaving an economist and two Realtors confused over where the market is going.
According to statistics released yesterday by the Metropolitan Regional Information System, Baltimore, Carroll and Howard counties all showed an increase in settled transactions last month. Carroll and Howard were up 5 percent each, and Baltimore City was up 2 percent. Sales in Baltimore County dropped 9 percent, and Harford County sales were down 4 percent.
Anne Arundel County is not a part of MRIS multiple list system.
However, when looking at pending contracts, every county except Carroll was down when compared with May 1996. Overall, pending contracts for the area dropped 22 percent. The biggest drop came in the city, where Baltimore contracts were down 34 percent from the same time last year. Next came Baltimore County at 28 percent. Even popular Howard County had a decrease of 13 percent.
"What we're seeing is cautious spending by consumers," said Michael Funk, research economist at the Regional Economic Studies Institute at Towson State. "We're seeing inventories building and rising and weaker home sales. Why that's happening I can't get a real handle on. There really is no reason for cautiousness on the part of consumers. The state of the Maryland economy is as good as it's been this decade," he said.
Funk said it's even more mysterious since 30-year fixed mortgage rates have been dipping below 8 percent in the past several weeks.
"Right now there hasn't been a better time to buy in recent years," he said. "It just wouldn't be reasonable to think that interest rates are going to go any lower; they are extraordinarily low as we stand. Employment growth is as good as its been for the last 10 years in Maryland. I really don't know what else it's going to take at this point."
But when compared with April, the May sales figures were more robust. Each county showed an increase. Harford County had the biggest jump with a 30 percent rise, followed by Howard with 26 percent, Baltimore with 20 percent, Baltimore County at 13 percent and Carroll at 4 percent.
"What I see is that April and May were real strong months for me, and I'm starting to see the fruits of that because I have a lot of settlements this month," said David Desser, an associate broker with Long & Foster in Pikesville. "But our office has been dead for the last two weeks, so I think June pendings are going to be way down. I think they will be below May pendings. But I would say that if we have three or four slow months, then September, October and November will be up months."
Said Cindy Ariosa, manager of the Timonium branch of Coldwell Banker Grempler Realty: "In the last week of May I had as many pending sales as I had in the whole first three weeks. The end of May ended up being very strong."
But Realtors believe sales could be further slowed because buyers generally have a wide range of inventory to pick from, and that was confirmed by numbers released by MRIS.
When compared to May 1996, each area -- except for Baltimore City -- showed a rise in inventory. For example, in the same time period last year, buyers in Baltimore County had 5,094 homes to choose from. This year there were 5,588 on the market.
"There's almost a year's worth of inventory out there right now," Funk said.
Yet even though it's a buyers' market, apparently they are paying a higher price.
Every county had a higher average sales price compared with the same time last year. Overall the average sales price was $142,058 compared to $133,521 for May 1996. Prices in Baltimore rose from $74,567 to $81,465. In Baltimore County the average sale rose almost 10 percent, from $129,879 to $142,245.
Pub Date: 6/12/97