Sales of existing homes in the Baltimore area dipped slightly in January compared with those of a year ago, bolstering some experts' prediction that the housing market will slow from last year's record-breaking pace. Prices, however, continued their double-digit climb.
Sales in Baltimore and five surrounding counties declined 1.95 percent to 2,419 homes, according to figures released yesterday by Metropolitan Regional Information Systems Inc. of Rockville.
Average sale prices rose 10.93 percent to $216,302, the listing service found. It took an average of 58 days to sell a home last month, four fewer days than in January 2003. Pending contracts, which offer a snapshot of future sales, were down less than 1 percent.
Home sales have been a consistent driver of the economy during the past three years, posting consecutive records as demand was fueled by extraordinarily low mortgage interest rates. That and a shortage of homes for sale helped push prices to all-time highs. Average sale prices posted year-over-year increases in every month but two last year.
Benchmark 30-year mortgage interest rates averaged 5.8 percent last year, according to the Mortgage Bankers Association. The group predicts rates will average 6.1 percent this year. As prices keep rising and interest rates increase, some economists believe sales will slow.
"It won't be as attractive to buy a home this year as it was last year," said Celia Chen, a senior economist with Economy.com in West Chester, Pa.
Other economists suggest that a strengthened labor market will motivate even more buying this year.
Cindy Ariosa, president of the Greater Baltimore Board of Realtors, said she is not concerned about last month's sales decline. Like most real estate experts, Ariosa expects sales this year to remain healthy even if they don't set another record.
"Mortgage rates are still relatively low," Ariosa said. "Housing is still an extremely sound investment."
In the Baltimore area, sales of existing homes increased last month only in Baltimore and in Harford County, rising 11.87 and 6 percent, respectively, when compared with sales in January last year. Carroll County had the biggest decline, 16.23 percent, followed by Howard at 14.03 percent, Baltimore County at 6.11 percent and Anne Arundel at 5.62 percent.
The sales drop was the first monthly decline since April, when sales fell 9.2 percent.
Existing-home prices were highest in Anne Arundel County, averaging $328,013. That was followed by Howard County, at $321,930; Carroll County, at $280,822; Baltimore County, at $211,862; Harford County, at $199,389; and Baltimore, at $100,995.
Anita Kellogg, 27, said she was eager to buy her semidetached house in Baltimore's Hamilton neighborhood before mortgage rates and home prices increased any more. Kellogg paid $87,000 for her home in December. "I'm happy I got in when I did," she said.