Sales of existing homes in the Baltimore metropolitan area fell 2.34 percent last month, registering the first decline in more than 27 months.
According to the Metropolitan Regional Information System, 2,374 units were sold in the area, compared with 2,431 in October 1998. Only the city and Baltimore County registered positive gains over last year, while every other jurisdiction dropped below October 1998 levels.
Area Realtors discounted the drop, equating it to little more than a sneeze in what is still a healthy real estate market.
"I don't think it is a big deal yet," said Patrick J. Kane, president of the Greater Baltimore Board of Realtors and vice president of Towson-based Coldwell Banker Grempler Realty, Inc. "I'm not concerned until I see another 30 or 60 days [of declines]."
"It's not a downturn, it's a softening," said John G. Evans, newly appointed president and chief operating officer of O'Conor, Piper & Flynn ERA, the Baltimore area's largest brokerage. "It's just a little less heated than it has been."
But both Kane and Evans agreed that a shrinking number of homes for sale in the area threatened the market.
"I am concerned with the lack of inventory," Kane said. "The feeling is [that the inventory] certainly is lower than what I can remember in an awful long time."
There were 13,608 homes for sale in the metropolitan area at the end of October, 3 percent less than in September and 13 percent less than in April, the highest this year with 15,381 units for sale.
"People have been complaining about [inventory] for months.
They come in and say there is nothing out there. That is a big problem right now," said Norma Jean Marsho, owner-broker of Re/Max Columbia since 1981.
"I couldn't understand how we were doing what we were doing [in sales] with the level of listings that were available," said Evans, who added that OPF's 1999 sales were 13 percent higher when compared with 1998.
Along with dwindling inventory, a late summer spike in mortgage rates to above 8 percent and a normal seasonal slowing in September helped push down sales.
"It was predictable," Anirban Basu, director of applied economics at the Regional Economic Studies Institute at Towson University, said of the decline. "Given the size of the increase in mortgage rates, 2.34 percent is a rather mild decline and it is suggestive that the consumer remains in a extremely healthy financial position."
Tom Champion, manager of the Lutherville office of Norwest Mortgage, said interest rates have been drifting lower -- down to 7.75 for a 30-year fixed-rate loan -- but that his customers have also had a difficult time finding a home to buy.
"We still have a lot of pre-approvals in our pipeline, but we just don't have properties for them. That has been an ongoing issue for some time. Certainly, the conversion of those pre-approvals to real deals wasn't that great during October."
Basu believes the home-buying pace will quicken, a likelihood underscored by a 16 percent increase in pending sales last month.
"The market in 2000 will be a strong one for home builders and those looking to sell their existing home," Basu said. "But the underlying strength of the market will not be as great, and it will look more like a buyer's market than was the case in 1999."