Baltimore Metro Area Contract Activity Surged Ahead of Weak Prices

March Signed Contracts Jump 33.1% Over February; Median Sales Price Down 11.1% Year‐Over‐Year, Lowest Since April 2004

Rockville, MD – (April 11, 2011) – The following analysis of the Baltimore Metro Area housing market has been prepared by housing market expert Jonathan Miller, based on the March 2011 RBI Pending Home Sales Index™ released today:

OVERVIEW:

The number of signed contracts surged 33.1% month‐over‐month to 2,857, the highest March total since 2007 and the third consecutive monthly increase. Despite the rise in pending contract activity, median sales price fell for the 5th consecutive month declining to $200,000, 11.1% below the March 2010 result and the lowest since April 2004. The region is still feeling the impact of the expiration of the federal homebuyers tax credit last April that was followed by a sharp decline in sales activity through the end of 2010 helping to push values lower.

KEY TRENDS

• Median sales price continues to fall as impact from the tax credit expiration still being felt. Median sales price is based on closed sales and trails pending sales activity by two to three months. The March median sales price of $200,000 was 11.1% below the $225,000 median sales price of March 2010 and is at its lowest level since April 2004. The drop in pending sales activity in the latter half of 2010 resulted in a pronounced downward trend in median sales price since last summer.
• Active inventory slipped from a year ago reflecting the tax credit’s incentive to bring listings to the market before the April 2010 expiration. There were 16,108 active listings at the end of March, 1.2% less than 15,689 active listings in March 2010. New inventory fell 18.1% below the amount that came on last year at this time but was 50% above the total for February as sellers begin to enter the “spring market” in larger numbers.
• Listing discount remains elevated at 11.7% as buyers continue to have plenty of choices. Listing discount—the percentage difference between the original list price and sold price—remains unusually high at 11.7% compared with the 5.5% monthly decade average as buyers continue to have plenty of listings to choose from. This also resulted in a longer period for properties to sell with the average days on market rising 17 days to 135, up from 118 in the same month last year and up from 132 days in February.
• Pending sales continued to outpace active inventory as absorption falls to lowest rate since April 2010. The monthly absorption rate—the number of months to sell all active inventory at the current pace of pending sales— fell to 5.6 months from 5.9 months in the same period last year. The March rate is slower than the 4.4 monthly decade average rate but faster than the 7.7 monthly 5‐year average rate as the market slowly moves toward improved efficiency.
• Pending home sales surge to highest March total since 2007, just above the decade average. There were 2,857 signed contracts between buyers and sellers in March, 33.1% more than were signed in February and 3.2% more than were signed in March 2010. Pending sales activity at this time last year was fueled by the nearing expiration of the federal homebuyers tax credit the following month. The expiration of the credit led to depressed sales activity for the balance of 2010. The recent jump in pending sales activity has the potential to stabilize prices during the spring.

The RBI Pending Home Sales Index™ is a two‐year moving window on the housing market using pending sales and median sold price. It provides unique insight into the state of the current housing market by measuring the number of pending sales through the most recent month. The results include pending sales through and including March 2011. The market area includes: Baltimore City, Baltimore County, Anne Arundel County, Carroll County, Harford County, and Howard County.

ABOUT JONATHAN MILLER:
Miller is President and CEO of Miller Samuel Inc., a leading real estate appraisal and consulting firm. A wellregarded real estate commentator, who appears in national publications including the Wall Street Journal and the NY Times covering national and regional housing issues, he has been named “Best Online Real Estate Expert" by Money Magazine. Miller’s stringent focus on neutrality has contributed to his position as one of the top 25 most influential real estate bloggers in the U.S. Follow him on Twitter @jonathanmiller.

ABOUT RBI
RealEstate Business Intelligence, LLC (RBI) is a wholly owned subsidiary of MRIS. RBI is a primary source of real estate data, analytics and business intelligence for real estate professionals with business interests in the Mid‐Atlantic region. The full monthly data report for all jurisdictions in the MRIS region, along with charts and graphics, can be found at www.rbintel.com/statistics. RBI is the only company in the Mid‐Atlantic region that provides timely, online access to statistical information directly from the Multiple Listing Service (MLS).