Home prices jumped in Oc­to­ber

Lim­ited sup­ply on mar­ket leads buy­ers to bid up

Baltimore Sun - - TRUMP TRANSITION - By Natalie Sher­man nsh­er­man@balt­sun.com

When Joe Conoscenti and his wife de­cided to down­size this fall, they were op­ti­mistic about the chances of sell­ing their long­time Cock­eysville home, which had a good back­yard, ren­o­vated kitchen and re­done porch.

But even they were sur­prised at the swift­ness of the sale. They re­ceived three of­fers within days of list­ing the property — in­clud­ing one above the $415,000 ask­ing price.

“I don’t know that we ex­pected it to be that quick,” said Conoscenti, 69. “It was a pretty pain­less ex­pe­ri­ence.”

Faced with lim­ited sup­ply of homes for sale, home­buy­ers are jump­ing on new list­ings, bid­ding up prices in a way agents said they haven’t seen in years.

The me­dian home price in the Bal­ti­more metro re­gion climbed to $253,000 last month, up 8 per­cent from Oc­to­ber 2015, ac­cord­ing to a new re­port by the Show­ingTime RBI re­search firm. It fol­lowed a sim­i­lar gain last month, and brought ap­pre­ci­a­tion so far this year to about 4 per­cent.

Some of the gain was due to a de­cline in dis­tressed sales. Those trans­ac­tions rep­re­sented about 16 per­cent of sales in Oc­to­ber, down from nearly 22 per­cent in the same month last year, ac­cord­ing to the study, which was based on data from the MRIS mul­ti­ple list­ing ser­vice.

But prices rose for nor­mal sales as well, with the area me­dian climb­ing nearly 5 per­cent from Oc­to­ber 2015 — one of the largest year-over-year gains of any month in the last three years.

“The scarcity of in­ven­tory is start­ing to have an ef­fect on pric­ing,” said T. Ross Mack­e­sey, sales man­ager for Long & Fos­ter’s Green­spring Val­ley/Lutherville branch.

The num­ber of list­ings in Bal­ti­more City and the five sur­round­ing coun­ties fell to 11,958 last month, down 14 per­cent from a year ago, con­tin­u­ing a con­trac­tion in sup­ply that started more than a year ago, the re­port said.

The lim­ited sup­ply ap­pears to be putting the brakes on sales ac­tiv­ity. There were 3,060 sales in Oc­to­ber, up just 3 per­cent from last year — a ma­jor de­cel­er­a­tion from the dou­ble-digit growth in sales that shaped the mar­ket in the past year.

Still, that’s an in­crease, which bodes well for sup­ply and de­mand fun­da­men­tals, said Andrew Strauch, a vice pres­i­dent of prod­uct in­no­va­tion at MRIS.

“It’s kind of work­ing the way one would think it should work,” he said. “You’ve got the bank-me­di­ated [homes] be­ing cleared out, you’ve got more sales go­ing into the mar­ket and then you’ve got de­creased in­ven­tory and that’s driv­ing up prices.”

Ap­pre­ci­a­tion was most pro­nounced last month in Bal­ti­more, where the me­dian sales price spiked 18 per­cent from a year ago, to $124,000.

In Har­ford County the me­dian sales price climbed to $265,000, up 15 per­cent year-over-year. In Car­roll County, the me­dian sales in­creased 9.4 per­cent from Oc­to­ber 2015, reach­ing $314,500.

Anne Arun­del County had a me­dian sales price of $323,450, up 7 per­cent year over year. The me­dian in Bal­ti­more County was $217,500, up about 1 per­cent.

Howard County, the most ex­pen­sive mar­ket in the re­gion, was the only ju­ris­dic­tion in which the me­dian de­clined, fall­ing 2 per­cent year- over-year to $380,000.

Strauch said he be­lieves the price gains will con­tinue, push­ing val­ues high enough to en­tice fam­i­lies that have been wait­ing for their home val­ues to re­cover since the hous­ing crash to sell. As in­ven­tory re­turns, that should help mod­er­ate the ap­pre­ci­a­tion in the spring. “I see no rea­son why it wouldn’t con­tinue in this pretty healthy cy­cle,” he said.

But buy­ers agent John F. Sul­li­van, vice pres­i­dent of Buyer’s Edge Co. Inc., said he doesn’t think the ap­pre­ci­a­tion is con­sis­tent enough yet to bring a flood of new sell­ers on the mar­ket. With a pos­si­ble in­crease in in­ter­est rates later this year, de­mand could weaken fur­ther, he said.

“I don’t see the low in­ven­tory be­ing re­solved un­til maybe next sum­mer, if we have a suf­fi­cient in­crease in prices,” he said. “That’s not guar­an­teed.”

Pa­tri­cia Kallmyer, vice pres­i­dent of Cold­well Banker’s Ti­mo­nium of­fice, said she thinks any hike won’t be se­vere enough to put a damper on de­mand, which has been strong this year, even dur­ing typ­i­cally slow pe­ri­ods. If any­thing, she said, it may push more buy­ers to the ta­ble.

“We are very op­ti­mistic about the real es­tate mar­ket,” she said.

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