A wrought iron gate leads to a private, tree-lined courtyard of attached homes, shutting out the bustle of North Calvert Street. The Station North townhouses rise four stories and boast granite kitchens, open floor plans and the floor-to-ceiling windows that new-home buyers have come to expect.
But the courtyard is deserted. In about half of the 32 homes, the oversized front windows reveal an emptiness back to rear windows. Several "for rent" signs appear next to front doors.
Like other new residential projects around the Baltimore area, Station North, near Penn Station, was planned at the height of the housing boom but not finished until after the market began to fizzle.
Some bigger condo projects in prime areas like downtown and Harbor East are said to be nearly sold out. But many other builders around the city and region are grappling with half-occupied, completed projects they assumed would be sold out long ago.
Sales contracts fell through when buyers couldn't get affordable loans. Investors who had hoped to buy in and then resell at a profit pulled out of the market. Buyers who had to sell their current homes first were stuck when they couldn't sell. Others balked at paying prices that had seemed more reasonable during the run-up in home prices.
New condo sales in metropolitan Baltimore fell 37 percent in the first half of this year - the latest statistics available - while new townhouse sales fell 15 percent, according to Hanley Wood Market Intelligence. And in the third quarter, as the credit crunch hit the market, there were more contract cancellations than sales in the Baltimore metro market, according to an analysis by Delta Associates, which includes projects that are selling or under construction.
Builders now are cutting prices to levels that are more than 10 percent below the height of the market.
They're offering help with mortgage payments or closing costs. A&R; Development is throwing in a free gym membership with the purchase of a downtown condo at the Breco, a conversion project near City Hall. Struever Bros. Eccles & Rouse is offering up to $30,000 in upgrades such as hardwood floors, granite counters and larger terraces on its Village Lofts condos in Charles Village.
"The market has definitely slowed down dramatically from what it was when we were under construction," said James D. Campbell, a principal with the Station North builder, Somerset Development Co., which originally had projected homes would be sold out by now at prices up to $450,000. Instead, it has reduced to $299,900 a home with hardwood floors in the kitchen, a slate-surround electric fireplace with remote; a security system and a full-size stackable washer and dryer.
"We had hoped to be out by now," Campbell said. "The concept was to leave the last units until they were ready to be completed and get the highest prices, but unfortunately the market changed before we got to completion."
The Breco is a conversion of a historic former printing warehouse where homes range from a one bedroom with den for $288,000 to a $630,000 penthouse with rooftop deck. It boasts sliding partition walls, hardwood floors, granite countertops and large factory windows. The majority of the condos sold quickly last year, but the downturn has made the final nine a tougher sell, despite a 10 percent price cut from the peak of the market.
"A year or two ago, you could sell your house and get whatever you wanted. Now people are not putting their houses on the market. It's taking so long to sell their house a lot of people have decided to wait," said Victoria Fitch, a sales associate for developer A& R Development.
The number of unsold new condo units in metro Baltimore has been growing since the end of 2005, when the region had 2,843 unsold units, according to the Delta Associates analysis. By the end of this September, the number had jumped to 5,091, including 865 in the city.
"Unfortunately, with multifamily projects, you have to plan a number of years in advance, and it takes a while to complete a project," said Bernard Markstein, a vice president and director of forecasting for the National Association of Home Builders. "People were starting projects in late '05 and '06, even as it became obvious that demand was weakening and excess supply was beginning to emerge.
"Once you start a project, and once you break ground, immediately your costs start rising, and even if you're looking at a weak market, the smart thing to do is to finish the project and make the best of it."
In April 2006, Jessica Franklin made a deposit on a $375,000 townhouse in Station North, with plans to move there from Washington and work from Baltimore as an affordable-housing consultant.
"It was close to downtown, and it was convenient to take the train," Franklin said, adding that she planned to travel back and forth to Washington.
But her job plans changed, and she decided to stay in Washington, she said. Shortly after closing on the home in May 2006, she put it up for sale. But by then the market had turned, and it was difficult to compete with the builder, who had lowered prices on new units and begun offering incentives. Now, the builder is offering one of the townhouses for $299,900.
"I just think that it was not a good investment for me because it turned out that the market is just not ready for those prices and probably won't be ready for that for a few years," said Franklin, who has since rented out her home and is waiting for the market to improve.
Still, the Baltimore area has fared better than harder-hit areas around the country that saw even greater price appreciation and speculative building and buying, such as Miami, Las Vegas and San Francisco, Markstein said. In downtown and surrounding neighborhoods, such as Fells Point and Canton, 330 condo units have been completed since 2005, representing less than 10 percent of the 3,770 housing units completed in or around downtown since 2000, said Bob Aydukovic, vice president of economic development for the Downtown Partnership.,
In downtown Baltimore's core, "Our market is still in pretty decent shape because, simply we have not had huge run-up in for- sale housing on the supply side," Aydukovic said.
The 414 Water Street project, which is nearing completion with 312 units, reportedly is almost sold out. The 120-unit The Vue in Harbor East, where condos started in the $300,000 range, has sold briskly from the start. Only six to eight are left, said Bob Rubenkonig, a spokesman for developer Struever Bros.
Sales have been much slower for Struever Bros. at Village Lofts, located atop trendy stores in a revitalized stretch of Charles Village near the Johns Hopkins University and selling for an average of $380,000. Pre-construction sales started more than two years ago; today, the project is just over half sold, the developer says. The change in market prompted Struever to change a project across St. Paul Street from the Village Lofts from luxury condos to smaller rental units.
"At Village Lofts, the market was decidedly slow to begin with, and it was such a long lead time," Rubenkonig said. "Now it is picking up because the streetscape is finished. In a flat market, people want to see and touch and feel something so they're not choosing from construction drawings."
Campbell, of Somerset Development, said new projections for Station North call for selling one or two homes a month, at an average price of $325,000, with the hope of selling out by spring.
"Our expectations back [in 2005] might have been unrealistically optimistic," Campbell said. "We're hoping now our expectations are unrealistically pessimistic, and we could do better."
lorraine.mirabella@baltsun.com