If there is any weakness in the Baltimore area housing market, it has yet to reveal itself as sales of existing homes in August increased 21.52 percent compared with the same month last year.
The increase was the largest for the year as reported by the Metropolitan Regional Information System -- the multiple-listing system used by the industry. The rise continued to substantiate the resilience of the market despite rising mortgage rates.
"Nothing seems to be able to cool this market off. An uptick in [mortgage] rates so what," said a befuddled Anirban Basu, director of applied economics at the Regional Economic Studies Institute at Towson University.
"I am surprised that the local housing market has remained this strong in the face of rising mortgage rates.
"Many economists had believed that the market would begin to show signs of wear by now, but the August figures suggest that that simply had not occurred," said Basu, who expected a slowdown last month.
And as sales continue to soar, so do the prices.
The average price of a home in the metropolitan area was $159,598, a 4.37 percent increase when compared with the average price in August 1998.
And the average price for a four-bedroom detached single-family home rose 10 percent, from $239,624 to $263,616, compared with the same period last year.
If you're shopping for a four-bedroom home in Howard or Anne Arundel counties, the sticker shock was even greater. In Howard, the price climbed 19 percent, from $260,582 in August last year to an average price last month of $311,148.
In Anne Arundel, the average price rose 23 percent, from $253,743 in August 1998 to $311,756 last month.
Townhouse buyers in the metropolitan area in August also had to reach deeper into their bank accounts as a typical three-bedroom unit rose 9.5 percent in price, to $105,631 from $96,410 in August 1998.
Morgan Amaimo, an associate broker in Timonium office of Long & Foster Real Estate Inc., said prices in Rodgers Forge, a much sought-after Baltimore County townhouse neighborhood just north of the city, have dramatically risen in the past year. Amaimo said three-bedroom, inside-the-block residences that sold last year for $115,000 to $125,000 "now are almost creeping into the $140,000" range.
As for the number of homes sold, every jurisdiction -- except Harford County, where there was a 2.21 percent decline -- enjoyed double-digit gains, led by Howard County with a 34.27 percent rise and the city with a 30 percent increase.
"For this time of year, compared to last year, the market is extremely hot," said Donnell Spivey of Re/Max Columbia.
"The [slight increase] in interest rates has stopped some people from acting, but it really hasn't affected a lot of people. It hasn't slowed people down that much," Spivey added.
Mortgage rates rose steadily during the summer, going as high as 8.25 percent before dipping slightly in the last few weeks. Last week, the average 30-year fixed-rate mortgage in the Baltimore area stood at 7.82 percent.
However, William Cassidy, manager of the Fells Point office of Long & Foster, said the summer spike in rates acted as a catalyst in turning house hunters into house buyers. "The fluctuations in the interest rates helped us because the fence-sitters move in that kind of market they became decisive," he said.
But more sales has also meant a shrinking housing inventory.
From an April high of 15,381 homes for sale in the metro area, the inventory has steadily declined to 14,129, a 9 percent drop.
Nevertheless, Basu believes that inflationary pressures will eventually force mortgage rates to resume their climb "and slow home sales at some point in the future."
Pub Date: 9/14/99