Sales of existing homes in April suffered the biggest monthly drop in almost three years in the Baltimore metropolitan area, falling 10.15 percent, a report showed yesterday.
Pending sales - an indication of future activity - were 2.78 percent higher than April last year, leading industry leaders to remain optimistic that home sales will continue to be one of the economy's growth sectors.
It was the second consecutive month of higher pending sales, according to statistics released by the Metropolitan Regional Information Systems Inc.
The decline in sales was the most since a 12 percent decline in May 1997. Patrick J. Kane, president of the Greater Baltimore Board of Realtors and vice president of Coldwell Banker Grempler Realty Inc., blamed the drop on a frosty January and February.
"We are looking at 60 to 90 days ago," Kane said of the time when April sales were being originated. "We had some horrendous snow situations and some bad weeks. Last year we had such a mild winter, we had no snow, no down time at all. This year we had winter down time."
Carroll County suffered the biggest drop, falling 15.51 percent over the comparable period last year. Baltimore County was next, declining 14.8 percent, and Harford County was off 13.14 percent. Anne Arundel dropped 8.69 percent; Howard dipped 7.76 percent; and Baltimore City was off by 3.24 percent.
"March and April were incredible months for us," said Marc Witman, associate broker with Long & Foster Real Estate Inc.
"We were doing twice as much business in March and April in terms of generating new contracts - pendings - than we were in January and February," Witman said.
Still, most agents' main concern remains the lack of inventory to show buyers.
In March, there were 12,113 homes for sale in the metropolitan area. In the height of the spring selling season, April's inventory grew by an additional 486 homes. In April 1999, there were 15,381 homes for sale.
In some areas and price ranges, the shelf is almost bare. In Howard County, for example, a buyer searching for a single-family detached home priced between $250,000 and $299,999 had 169 homes to choose from in April 1999. Last month, there were only 83 on the market.
"Some [buyers] call and say this is what we want," said Pat Hiban of Re/Max Advantage Realty in Columbia. "We hang up the phone and we kinda chuckle and say, 'That's funny because that's what 12 other people want.'"
And time on the market continued to shrink as it took a home an average of 106 days to sell last month compared with 130 days in April 1999. But as days on market contracted, the average price for the metropolitan area rose to $155,870 compared with $149,467 in April 1999, a 4.28 percent rise.
"We are carrying a lower listing inventory than ever, but we are doing the same business," Witman said.
Although 30-year, fixed-rate mortgages, hovering at 8.5 percent, have risen in the past several weeks in reaction to and in anticipation of Federal Reserve Board interest rate boosts, few industry professionals say that it has been a roadblock. Instead, it's the continued strength of the economy that is keeping the market humming.
"The economy just is not slowing down," Kane said.
"Typically, before when the stock market would begin to fall we would almost see almost an instant corollary of people just getting their confidence shaken and the sales starting to slow.
"The market has been volatile, up and down everyday, and it doesn't seem to bother anyone," he said.
"People are more focused that they want to buy a home," said Kevin Michno, senior vice president of Mercantile Mortgage Corp. "That a time to buy a home is right now, and they are willing to adapt to whatever [mortgage] product that is the most favorable to them."