Shortage of new housing in Howard has prices rising

A decreasing supply of newly constructed homes in Howard County is driving prices of all homes higher, according to an annual report examining development within the county.

Only 1,397 homes received occupancy permits between fall 2002 and fall of last year, down from 1,951 during the previous 12 months, the report found.


Prices for single-family homes and townhouses have increased more than 10 percent annually in the last five years. Mean sales prices for single-family homes are now pushing $400,000, and townhouses surpassed $200,000.

According to the county planning department's Development System Monitoring Report, sales of single-family homes decreased by 4 percent last year, and townhouses decreased last year by 17 percent. Researchers attributed this to the drop in new construction.


Prices continued to climb. The mean price for single-family homes increased to $396,678 last year and the mean price for townhouses to $203,347, up 13.9 percent and 10.9 percent respectively from the previous study. The report indicated that low mortgage rates contributed to higher prices.

Mean home prices ranged from $207,310 in Jessup to $632,060 in Dayton.

"Howard County is known nationally for its education base," said John Hopkins, associate director of applied economics at the Regional Economic Studies Institute at Towson University.

Because of Howard's high quality of life, "you have a lot of young professional couples that are willing to pay top dollar," Hopkins said.

Andre De Verneil of the Interfaith Coalition for Affordable Housing was surprised by the data. Members of the group advocate for more moderate-income housing.

"It just underscores the problem that middle-income people are being squeezed out of the market, especially people starting out," he said.

Rick LaRocca, who has been a real estate agent with Re/Max in Columbia since 1987, said he believes that low interest rates could help combat the effects of what he described as "a tough market, with the escalating prices over the years."

"It's not the purchase price - it's the monthly payment that makes it affordable," he said.


"If interest rates drop to 2 percent, $600,000 is going to look affordable," he said.

New homes are expected to add about 3,948 people to the county's population, with about a third in Ellicott City, about a quarter in the southeast and a fifth in the rural west, according to the report.

It also indicated that more than half the homes in the approval pipeline are part of phased, planned developments such as Maple Lawn Farms in Fulton and Waverly in Woodstock.

"There's always been a lot of growth in phased developments," said Jeff Bronow, chief of the research division of Howard County's Department of Planning and Zoning.

Bronow predicted a switch between current projects and Howard's continued growth based on the phased development. Last year, the ratio was skewed toward single-family homes, representing about half of developments.

However, as the county moves toward build-out - using up the supply of unimproved land - about two-thirds of the homes built in these future developments will be townhouses or apartments. Many of those projects include housing for adults age 55 or older, as well as homes within phased mixed-use developments such as Maple Lawn Farms, he said.


"The future for Howard County is going to be a big switch toward higher density," Bronow said.

Building permits for nearly 1.6 million square feet of non-residential space were issued last year. That was down from almost 1.8 million square feet in the previous study. About 46 percent of building permits for commercial or industrial development were for manufacturing uses. More than 60 percent of the square footage was in areas east of Interstate 95, according to the report.

Based on capacity indicated on the building permits issued for commercial and industrial development last year, planners estimated that about 3,066 jobs could be created within the county. This is slightly lower than the 3,144 predicted in the previous study. Half of these potential jobs would be located in areas east of I-95.