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Home sales fall 33% in Md.

A widening swath of the country - including the Baltimore metro area - saw home prices decline during the final three months of last year.

The 1 percent decline in the median price for a single-family home in the Baltimore area was the first in 11 years, according to a quarterly report released yesterday by the National Association of Realtors.

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Nationwide, median prices declined in just over half the 150 metropolitan areas surveyed by the trade group. Last spring, two-thirds of the country's metro areas were still reporting price gains.

A bright spot in Maryland was the Cumberland metro area, which topped the nation with price gains of 19 percent. That region - which includes Allegany County in Western Maryland and a small part of West Virginia - has ranked well for months, benefiting from its affordability as pricier metro areas feel the pinch. The median price for a single-family home in the Cumberland area was $116,600, well under half the Baltimore area's $275,100 price.

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At the other extreme, the Hagerstown metro area reported a 10 percent drop, to $192,100. It was one of 16 metro areas with double-digit declines. Hagerstown's hammering is a sharp change from the boom times, when priced-out commuters from the Washington area came in search of cheaper housing.

Maryland as a whole is feeling the slump keenly: Sales fell just over 33 percent, one of the most severe drops in the nation, the Realtors said. Only six states reported bigger declines. The Maryland sales drop was slightly worse than California and Florida's, frequently considered the hardest-hit by the housing downturn.

"That's really remarkable that sales can fall so far and so fast when the overall economy ... continues to function well," said Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic and policy consulting firm. "There really is very little evidence that the broader labor market is slumping in Maryland in any significant way."

The problem, in his opinion: "Prices remain too high." Until they drop more, he said, they aren't attractive "to the shrinking pipeline of available buyers."

Though unemployment has remained low in Maryland, Basu thinks the state's economy will be hurt by housing-related problems this year. He expects employers will add 10,000 to 20,000 jobs. That would be the fewest since 2003, when the state was dealing with a national post-recession hangover.

The country has felt the economic drag for months. Falling sales, rising foreclosures and the resulting tighter credit standards are major reasons why a number of leaders and economists fear the United States is in or will soon be in a recession.

Those economic fears have fed back into the housing market nationwide. Only North and South Dakota did not see a drop in home sales. (The Realtors had no sales data for Idaho, Indiana or New Hampshire.)

The biggest price drop among metro areas in the single-family market was reported in economically struggling Lansing, Mich., down almost 19 percent.

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Barry R. Glazer, broker for Century 21 Downtown in Baltimore, sees continued pressure on prices in the city waterfront neighborhoods he focuses on - particularly new construction and newly rehabbed homes. There's lots of both there.

Real estate investors, stuck with high interest payments every month their homes go begging for buyers, are looking to cut their losses, he said.

"There's definite pressure for them to get rid of these houses quick," Glazer said.

jamie.smith.hopkins@baltsun.com

Biggest sales drops

By state, fourth quarter 2007 vs. fourth quarter 2006:

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Nevada: 44.2 percent

Wyoming: 42.4 percent

New Mexico: 38.7 percent

Oregon: 38.4 percent

Arizona: 37.5 percent

Utah: 33.8 percent

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Maryland: 33.5 percent

California: 29.8 percent

Florida: 29 percent

Georgia: 23.8 percent

[ Source: National Association of Realtors]


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