Low Inventory Remains the Story in Baltimore Metro Market

Foreclosures continue to decline, short sale market share up

Rockville, MD –(February 10, 2012) – The following analysis of the Baltimore Metro Area housing market has been prepared by RealEstate Business Intelligence (RBI), and is based on the January 2012 RBI Pending Home Sales Index™ released today.

View PDF version of this release

OVERVIEW

Baltimore Metro Area listing inventory ended January at the lowest level since April 2006, yet new contract activity was 2.5% higher than January 2011. Pricing continued along a stable course with a nominal year-over-year decline but the median sold price for townhouses showed a surprising year-over-year spike of 22.6%.  The market share of foreclosed listings in both sales and inventory continued the previous month’s trend of sharp year-over-year declines. New listing activity continued to decline compared to the same period last year, though there were 16.9% more short sales added in January compared to January 2011.

Contract Activity and Sales

There were 1,334 homes sold in the Baltimore Metro Area in January, down 4.9% from January 2011, but 4.1% higher than the 5-year January average. The condo/coop market actually saw a year-over-year increase of 21.8% with 151 sales compared to 124 in January 2011. The 713 detached properties sold represented a decline of 5.3% from the January 2011 level.

The 209 foreclosed property sales represented a decrease of 47.0% compared to 394 in January 2011. The 168 short sales, on the other hand, represented a significant increase of 48.7% over the 113 that closed in January 2011.  15.7% of all sales were  foreclosures, down sharply from the 28.1% foreclosed share last January.  Short sales were12.6%, , an increase of 8.1% since January 2011. Traditional sales accounted for 71.9% of all sales, the lowest percentage since April 2011, but higher than the 64% share last January.

Contract activity continues to show positive signs, with 2,097 new contracts signed in January representing a 2.5% year-over-year increase, a positive start for the new year and demonstrating evidence of increased consumer confidence. Contract activity for condo/coop properties saw the largest year-over-year gains, with 233 new contracts in January representing a 23.9% increase over the 188 contracts written in January 2011

Inventory level remains low, market showing balance.

With inventory levels shrinking 4.4% month-over-month to close January at 12,191 active listings, available market supply is at the lowest level since April 2006. While the 2,883 new listings added in January represent a 55.1% increase over new listings added in December 2011, this is only nominally higher than the 10-year average December to January increase of 54.7% in new listing activity and is 10.8% lower than the January 2011 level of 3,176 new listings. The number of active listings compared to a 12-month rate of 1,838 sales per month indicates thismarket is reaching a balance between buyers and sellers with 6.6 months of available inventory. Five to six months of supply indicates a market is balanced between sellers’ desire to sell and buyers’ demand to purchase.

The 244 foreclosed listings added in January are 49.7% fewer than the 485 added in January 2011 and the foreclosed market share of inventory continues to fall, with only 4.1% of active listings under foreclosure. This represents less than half the 10.3% share in January 2011. The 2,038 active short sale listings made up 16.7% of the market in January 2012, up from 12.6% January 2011 and marking the tenth consecutive month of increase in short sale share.

Pricing: Attached and Detached properties head in opposite directions.

Overall, home prices have remained stable compared to January 2011, with a median sold price of $208,370 down less than a 1 percent from $210,000 a year ago. The 5-year average decline from December to January is -5.8%, the December to January decline this year was 5.2%, in line with normal seasonal patterns.  Baltimore City posted a surprising 28.6% year-over-year increase in median sales price, though at $93,100, it remains the most affordable area of the six jurisdictions in the Baltimore Metro Area. The only other jurisdiction posting any annual appreciation in median sales price was Howard County at $348,500 in January 2012 compared to $345,000 a year ago.

The median sold price for attached properties (townhouse, condos and coops) in the region increased 15.2% to $167,000 from January 2011 while the median sold price for detached properties decreased 7.6% to $254,000 in January 2012. Foreclosed properties had a median sold price of $105,000, or only 43.8% of the $240,000 median sold price for traditional property sales. But the traditional sale median price was down 7.7% from January 2011 while the foreclosed sale median price represents a 16.7% increase year-over-year. The $169,500 median price for short sales represents a 17.3% year-over-year decrease from the $205,000 level in January 2011.

The RBI Pending Home Sales Index™ is a two-year moving window on the housing market using new pending sales (signed contracts) and median sales price (closed sales). 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 December 2011.  The market area includes The City of Baltimore, Anne Arundel County, Baltimore County, Carroll County, Harford County and Howard County in Maryland.