Slow and Steady November Price Gains in Baltimore Metro vs. 2011; Sales Up Sharply

Slow and steady gains persist for several key indicators relative to last year; Highest proportion of condo sales on record for the metro area

OVERVIEW

Activity in the Baltimore Metro housing market remains steady, up slightly from last year, but the rate of year-over-year growth is slower than earlier in the year for many indicators. Historically sales decline between October and November, but the uptick in new contract activity last month led to a rise in sales in November. Year-over-year growth in new contracts remains, but is down considerably across all property segments this month, which could be an indication of cooling market demand. Condos continue to increase market share, reaching their highest proportion of sales on record in November.

Easier financing options and lower price points are likely playing a role in the observed condo growth. The inventory of homes for sale continues to decline, however new listings appear to be on an upward trend. The low supply of active listings are keeping prices stable and rising slowly across the metro area. Buyer demand has been improving but seller participation in the market remains low. This is due to both economic uncertainty and potential equity losses in many areas. With the Federal Reserve’s September announcement of continued low interest rates through 2015, it is feasible that many buyers will wait it out until more options become available in the market. This could mean slower sales and stable prices in the near-term.

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CLOSED SALES

Sales continue climb relative to last year; condo market posts highest year-over-year gain in over 2 years. There were 2,017 sales in November in the Baltimore Metro region, which is 24.0 percent higher than last November, but still a few hundred shy of the 10-year average for this month. Sales typically decline between October and November, but the uptick in new contracts last month has led to an unusual 2.5 percent increase in sales from October. Sales numbers for all property segments are up from last year. Condos have the sharpest gain, up 49.7 percent from November 2011, followed by townhomes at 22.3 percent, and single-family homes up 20.4 percent. The condo market has seen considerable improvement so far this year, and as of November accounts for 12.5 percent of all sales in the Baltimore Metro Area. This is the highest proportion on record for condos with data available back to 1997.

PRICES

Consistent median sale price gains continue for the region relative to last year. At $230,000, the median sales price in the Baltimore Metro region is up 3.5 percent from this time last year. The price growth has been steady but slow over the past few months compared to the late spring and summer markets. Once again, single-family homes led all property segments in price growth, up 6.6 percent from November 2011. Townhome prices are up a marginal 1.8 percent, and condos are virtually unchanged. Baltimore City leads all jurisdictions in year-over-year price growth. At 114,950, the median price in Baltimore City is up 22.3 percent from this time last year. Median prices in all other jurisdictions in the metro area are up with the exception of Baltimore County, which is holding steady at $200,000, unchanged from a year ago.

NEW CONTRACTS

New contract activity remains higher than last year, but slows considerably across all property segments. There were 2,213 new contracts signed in November in the metro region, up 6.5 percent from this time last year. After an uptick in new contracts last month, November totals have fallen in line with the seasonal pattern, down 15.0 percent from October. The 10-year average monthly decline for November is -13.9 percent. Townhomes had the sharpest growth from last year, up 7.8 percent. New contracts on single-family homes and condos rose 6.8 percent and 1.3 percent respectively. Year-over-year growth for all property segments has slowed significantly from recent trends. This could be an early indication of tempered demand in the market and a sign that economic uncertainty remains a concern.

INVENTORY

Active listings are about half of their peak level; a new pattern for new listings has emerged. There were 10,777 active listings at the end of November in the Baltimore Metro Area, 24.3 percent below last November. The total inventory of active listings is now a little more than half of its peak, which was over 20,000 in the summer of 2008. While absorption continues with active listings, new listings appear to be rising, albeit slightly. There were 2,513 new listings entered in November, 13 more than this time last year. While the change is slight, the pattern that has developed over the past 4 months suggests new listings are trending upward. The low inventory of homes for sales is having a direct impact on the median days-on-market, which was 48 days in November, down 33 days from this time last year. The sale-to-list-price ratio also continues to rise due to the low inventory, and is now 92.2 percent, up from 88.9 percent last November.

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About the RBI Metro Housing Market Update

The Baltimore Metro Area Housing Market Update provides unique insights into the state of the current housing market by measuring the number of new pending sales, trends by home characteristics, and key indicators through the most recent month compiled directly from Multiple Listing Service (MLS) data in RBI’s proprietary database. The bulk of this report’s content is readily available, down to the ZIP code level of granularity, via interactive charts and reports offered via rbiEXPERT, a premium subscription service offered to real estate professionals interested in growing their business with the help of industry-leading and user-friendly analytics. The Baltimore Metro Area housing market includes the City of Baltimore, Anne Arundel County, Baltimore County, Carroll County, Harford County and Howard County in Maryland.

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About the Center for Regional Analysis at George Mason University

The Center for Regional Analysis conducts research and analytical studies on economic, fiscal, demographic, housing, and social and policy issues related to the current and future growth of the Virginia, Maryland, and DC areas. Through its range of research and programs — major economic impact studies, economic forecasts, fiscal analyses, conferences and seminars, publications, information services, and data products — the Center’s activities strengthen decision-making by businesses, governments, and institutions throughout the Greater Washington region.  Visit http://cra.gmu.edu to learn more.