Baltimore Metro Sees Highest Contract Signings for June in 4 Years

Buyers and Sellers Signed 2,585 Contracts in June – Most Since 2007 – Though Market Saw 5.3% Month-over-Month Seasonal Decline in New Pending Sales. Median Sales Price Increased 6.1% Month-over-Month to $235,500 but Remained 5.8% Below Last Year’s Level.

View PDF version of this press release

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

OVERVIEW:

New pending sales activity slipped 5.3% to 2,585 from May to June 2011, consistent with the 3.4% decline averaged over the same period in the prior decade.  However, the June 2011 total represented the most signed contracts for June in 4 years. The 30.8% jump from the June 2010 pending sales total of 1,977 reflected the sharp decline in contract activity immediately following the April 2010 expiration of the federal homebuyer tax credit and not a recent surge in contract activity.  Median sales price seasonally increased for thethird consecutive month, reaching $235,500 in June but remained 5.8% below $250,000 in the same month last year.

KEY TRENDS

• Most new contracts signed during the month of June since 2007.  There were 2,585 new pending sales in June 2011, below levels signed over the previous three months but the most for the month of June since the 2007 total of 2,842.  The number of new pending sales declined 5.3% from May, consistent with the 3.4% average May to June decline of the previous decade.  New signed contracts were 30.8% above the June 2010 total due to the precipitous drop in activity following the April 2010 tax credit expiration, not due to a recent surge in signed contract activity.

• Median sales price fell short of last year’s June level.  Median sales price for June 2011 was $235,500, the highest median sales price reported in 8 months, 5.8% below $250,000 in June 2010 but 6.1% above the May 2011 median sales price of $221,950.

• New inventory entering the market fell sharply as active inventory slipped.   New listings fell 10.7% to 4,051 in June 2011 from 4,534 in May 2011 and were 14.6% below 4,746 listings in June 2010. A key factor in the decline is attributable to decline in active foreclosure activity.  New foreclosure listings fell 51.4% in June 2011 from the same month last year and foreclosure market share of new pending sales fell to 15.7% from 21.4% over the same period.  The “robo-signing” mortgage servicer foreclosure scandal last fall likely slowed the release of foreclosure listings to the market.

• The absorption rate slowed as market entered the seasonal summer slow down. The monthly absorption rate (the number of months to sell all active inventory at the current pace of new pending sales)for June 2011 was 6.6 months, edging higher than the May 2011 6.3 month rate as active inventory stabilized as pending sales cooled. 
• The spread between buyer and seller remained above historic norms.  The listing discount, the percentage difference between the original list price and the sales price, was 9% in June 2011, nominally below 9.1% in May 2011 but higher than the 8% average in June 2010.  The average monthly listing discount for the past decade is 5.7%.    Days on market averaged 112 days in June 2011 compared to 50 days in June 2006.

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