Baltimore-area home prices rise

The Baltimore Sun

Metro area home prices advanced nearly 5.5 percent in June, led by Baltimore City where the average price breached the $200,000 mark for the first time, statistics released yesterday showed. But with sales volume dropping at a double-digit rate and listings continuing to mount, economists said that the price gain likely was the result of a shift to more expensive homes rather than a sign that the housing slump was nearing an end.

The average price of a house in Baltimore and the five surrounding counties rose to $337,102 last month, from $319,633 in June 2006, according to Metropolitan Regional Information Systems Inc., a Rockville firm that tracks sales through the multiple-listing service. Gains were widespread, with only Carroll County registering a decline.

That's because it's the pricier homes that are selling, both in the city and suburbs, said economist Anirban Basu, chief executive officer of Baltimore-based Sage Policy Group Inc.

"At the higher end, there continues to be a race for superior properties as [buyers] compete against each other," he said. "The homes that are selling are disproportionately higher-end homes."

Those looking for an end to the housing slump will have to wait longer, Basu said.

"I think that the down cycle in housing has a bit farther to run, probably through the balance of 2007 and into 2008," he said. "There is so much active inventory ... and with so much product competing for buyers' attention, buyers are in no rush to purchase a home with reasonably average amenities."

In Baltimore City the average price rose to $200,250, up more than 11 percent from $180,176 a year earlier, MRIS reported. That was followed by Harford County, where the average rose 7.22 percent. Prices in Anne Arundel, Howard and Baltimore counties rose less than 5 percent.

The gains came a month after the area's average home price had declined for the first time in six years. Values in May dipped just over 1 percent from year-earlier levels, MRIS had reported.

Listings swell

In all, 3,365 home sales settled compared with 3,909 in June 2006, a drop of nearly 14 percent as homes took longer to sell - an average of 82 days compared with 51 days in June 2006.

Every jurisdiction posted fewer sales. Carroll had the sharpest drop, nearly 18 percent, while Howard County's decline was the smallest at 7.29 percent.

Listings swelled to a record of nearly 20,000, as only 3,197 sales contracts were signed.

"Buyers are not as pressed to work something out," said Pat Hiban, a broker with Keller Williams Select Realtors. "It used to be people would find a house they fell in love with first and negotiate second. They were going to work the deal out. Now they're negotiating first and deciding second."

Dean Rust, a computer programmer planning to move from Columbia to Ellicott City, said he took his time looking before signing a contract last month. Because of the selection of homes on the market, he said, "I didn't feel that rushed. It gave you a little more time to check things out."

Real estate agents said they are urging their seller clients to heed the market.

"Our marketplace right now is like a bad weather market for sellers," said John Toner, a broker with Providence Real Estate in Columbia. "If you make a mistake in this market, you'll be punished for it more severely than in the last few years. Buyers have a lot more to choose from; they are being a lot pickier, and they have almost no sense of urgency."

William L. Yerman, president of the Greater Baltimore Board of Realtors, said sellers are adjusting their pricing and expectations.

'Some competition'

For homes that are priced right, he said, "we do have more than one contract on a house and some competition."

Scott Smith and Heather Leatherman spent about six months looking for a house before they found their ideal property, a 100-year-old farmhouse in Ellicott City. Even though they had to sell his condominium in Columbia and her townhouse in Westminster, they immediately put in a noncontingent offer.

"We were noticing a lot of houses are on the market right now, but if a house looks good and is priced competitively, it would go quickly," said Smith, an electrical engineer for NASA Goddard Space Flight Center. They got the house for slightly above asking price but with $30,000 back for closing-cost assistance and repairs and settled last month.

The couple found that getting a good deal as buyers goes hand in hand with offering good deals as sellers.

When Smith put his two-bedroom condo on the market, six others in the neighborhood also went up for sale. He listed his condo for $245,000, at the lower end of the range of the similar condos, but after about a month, decided to accept a contract for $10,000 less with $7,200 in closing-cost assistance.

Leatherman was going for a quick sale, too, Smith said. Though she had upgraded her townhouse with tile flooring and crown molding, she listed it at $220,000 with $5,000 back for closing costs. She got a contract, for the asking price, in one week.

Still, plenty of sellers aren't ready to make concessions.

Rust, the buyer with a contract on an Ellicott City house, said he is considering holding on to his current house and renting it. "It would give me some time to make upgrades. In a couple of years the market will be a little less competitive."

lorraine.mirabella@baltsun.com

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