Maryland's housing market spiraled further downward this past summer, registering the fourth-biggest drop among all the states as home sales fell nearly 30 percent from a year earlier.
Despite the tumbling sales, the median sale price of existing homes in the Baltimore area managed to rise 1.7 percent in the July-September quarter compared with the same period last year, according to a National Association of Realtors report released yesterday. But Maryland's home-sales dive of 28.6 percent was more than double the 13.7 percent drop for the nation.
Indications are that the market isn't getting better. Home sales in Baltimore and the five surrounding counties plunged 31.74 percent in October from a year earlier, the most in the eight years that Metropolitan Regional Information Systems Inc. has tracked sales through the multiple listing service.
"At one point, homes were selling very fast, and now the inventory is catching up and overtaking the demand," said Daraius Irani, director of the applied economics group at RESI, Towson University's research and consulting arm. "It's somewhat of a concern that it's fallen."
Only three states -- Nevada, Florida and Arizona -- had greater slumps in home sales than Maryland. That only two states, North Dakota and Vermont, posted increases emphasizes the severity of the housing market slowdown, industry experts said.
The sales picture in Maryland deteriorated over the course of the year, the NAR data show. In the second quarter, the year-over-year decline was 21.1 percent, the fifth-worst in the nation. In the first quarter, the decline was 10 percent. Still, during the third quarter, all the state's metro areas surveyed, except Hagerstown/Martinsburg, W.Va., reported an increase in the median sale price of existing single-family homes. The median is the midpoint, with half of the homes selling for more and half for less.
At 70th, the Baltimore region ranked near the middle of the 150 metropolitan areas surveyed nationwide, 93 of which demonstrated price increases, according to the NAR report. Hagerstown, where prices dropped by 8 percent, was one of 54 metro areas to experience declines. The biggest price drop -- 12.4 percent -- came in Palm Bay/Melbourne, Fla.
The median price in the Washington, D.C., metro area, including Northern Virginia, rose 1.3 percent, the NAR reported.
In Montgomery and Prince George's counties, Irani said, prices are starting to fall. But home prices remain resilient in Howard County and the rest of the relatively more affordable Baltimore metro area, he said.
Marc Witman, a partner with Yerman Witman Gaines & Garceau Realty, said home prices should drop by early next year to counter the plunge in sales. "There's a disconnect between sellers and the buyers' expectations," said Witman, a Baltimore County-based realtor. "Until the sellers come down with their pricing, the buyers aren't going to jump off the bench."
Cumberland in Western Maryland is a bright spot for the state. Home prices in that area rose by 6.7 percent, the 19th-largest gain in the United States. But it was substantially below the first quarter's 17 percent, which had ranked it No. 1. nationally.
Bismarck, N.D., topped the July-September quarter list, with home prices growing by 15.1 percent compared with the same period last year.
In the Baltimore area, the median price of a single-family home rose to $291,400, up from $286,500 during the July-September quarter last year. The median price of an apartment or condo rose 2.9 percent to $241,100 from $234,400 a year earlier.
Nationwide, the median price of a single-family home in metropolitan areas dropped by 2 percent, from $225,300 last year down to $220,800 in this third quarter. Some 5.42 million housing units were sold nationwide during the quarter, compared with sales of 6.29 million during the same time last year.
Amid the slumping market, buyers will still pay higher premiums for a home with better amenities and a desirable location, Witman said. He described recently selling an upscale Pikesville area townhouse for more than $400,000, though several other homes in the development were on the market with a lower price tag. But Witman said the townhouse he sold was in the best shape.
"Buyers will pay for quality," Witman said. "But they won't pay top dollar anymore for properties that are marginal in location or condition."
Existing home sales, July-September
Where sales fell most
1. Nevada -- 35.3 %
2. Florida -- 32.0 %
3. Arizona -- 30.9 %
4. Maryland -- 28.6 %
5. California -- 27.8 %
Where sales increased
1. North Dakota +2.9 %
2. Vermont +0.8 %
[Source: National Association of Realtors report]