Low mortgage rates continued to fuel a strong housing market in October as existing-home sales and values in the Baltimore area grew by double digits.
Sales in the five-county metropolitan area and Baltimore City rose 10.64 percent to 3,244 homes last month compared with October 2001, according to figures collected by the Metropolitan Regional Information Systems Inc., the Rockville-based multiple-listing service that tracks sales. The average sales price in the area last month was $188,245 - a 15.11 percent increase from a year earlier.
Homes are remaining on the market longer than they were a year ago, but not by much. Homes were remaining listed an average of 55 days in October - a day longer than last year. Some real estate agents said the market remains hot, but they see a slight difference in how quickly homes are moving compared with the summer months.
There does seem to be some relief to homebuyers who have complained during the past few months of having to choose from a limited inventory of homes. The number of houses for sale has grown in each of the past three months. The figure was 7,807 in October compared with 7,536 in August and 7,687 in September. But the number is still 25 percent below where it was in October 2001.
"We're still holding out hope," said Linda LeVeque, 36, of Baltimore, who has been trying since August to buy her first home. "It's frustrating because it sounds like houses are going so fast."
Pending sales in the region, which offer a snapshot of future settlements, were up 8.85 percent from last October.
Carroll County had the biggest percentage increase last month, with sales increasing 16.67 percent over October 2001. The average sales price there increased 27.6 percent to $238,972.
Sales in Baltimore County increased 7.68 percent - the smallest increase in the region - and average sale prices rose 14.42 percent to $178,031.
"I think the inventory has slowed down and the amount of buyers out there has slowed down, but I think that's just because of the holidays," said Dicky Gaines, an agent with Coldwell Banker Residential Brokerage's Greenspring office.
A booming real estate market has been one of the linchpins in helping to keep the slumping economy from weakening further. Mortgage rates reached four-decade lows recently, allowing many buyers to afford more expensive homes. Also, a weak stock market has pushed more investment dollars into real estate during the past few years, helping to increase home values.
The Mortgage Bankers Association of America said yesterday that the average rate for a 30-year fixed mortgage hit a record low of 5.74 percent last week. When the Federal Reserve cut a key interest rate by a half point last week, many brokers and economists said they expected 30-year fixed mortgage rates to hover near 6 percent.
"We see at least for the first quarter of 2003, rates staying in a narrow trading range of where they are," said Al Ingraham, a mortgage banker and regional vice president for First Horizon Home Loans in Timonium. "I think there is a sense of immediacy for some people because the rates are at such low levels."
That's true for LeVeque, who along with her husband, Joe, has been shopping for a single-family home valued between $100,000 and $150,000. Linda LeVeque said they lost out on a home in Parkville earlier this month after waiting a few days to make an offer.
"I'm kind of sorry we didn't try to find something sooner," she said. "It makes me very nervous because I want to be able to afford a nice house, but I don't know that we're going to be able to afford as much of a home as we could have a couple of years ago."