A solid year for Baltimore's home market
2012 was marked by rising prices but shrinking inventory
Re/Max Branch Manager Wayne Curtis (left) greets real estate agent Jenell Forman during the opening of a Re/Max Advantage Realty office. (Karl Merton Ferron, Baltimore Sun / February 20, 2013)
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"This was the first time we were ready to even think about buying," said Tim Shirah, who with his wife, Michele Shirah, submitted a $395,000 bid and beat a handful of other offers for the new home. They wanted to stop "throwing money away on rent," he said.
For the Shirahs, the time was right. They had money from their wedding to put more than 20 percent down and interest rates were at extraordinary lows. But there weren't many homes on the market that they liked, so when they found something that was appealing — even if it was just a hole in the ground — they acted quickly.
Their story sums up home buying in greater Baltimore last year: Shrinking inventory meets increasing demand, so prices rise, leading to a more stable market than the one that wobbled along after the bust.
Average sale prices were up in just more than half of the Baltimore region's ZIP codes compared with 2011, according to a Baltimore Sun analysis of two years of individual home sales records from Metropolitan Regional Information Systems Inc., a multiple-listing service, and its data arm, RealEstate Business Intelligence LLC. Prices were flat in another 11 percent of the ZIP codes, the analysis showed.
That's a significant improvement from a year earlier. At the end of 2011, average sale prices were up from 2010 for just one in five of the metro region's ZIPs.
ZIP codes were included in the analysis only if there were at least five home sales each year. Because the sales used in the analysis are from the multiple-listing service, they primarily include homes sold through a real estate agency and do not encompass most homes sold by owner or at auction.
"It's stabilizing and then some," said Jonathan Hill, RBI's president. All of the numbers that real estate professionals look at improved last year, he said.
The median sales price for the whole region increased 4.5 percent. The median number of days a home spent on the market fell nearly everywhere in the region, dropping by more than 20 days from 2011's rate to a median of about eight weeks. Sales prices inched closer to list prices, with the sales-to-list price ratio breaking 91 percent. (It was 88.2 percent in 2011.)
And more homes sold were selling. More than 25,000 homes sold in Baltimore and its five neighboring counties — Anne Arundel, Baltimore, Carroll, Harford and Howard — last year. That's up 9 percent from 2011, according to RBI's numbers.
"That shows the market is in recovery mode," Hill said. "It's a slow and steady path back."
Other than January, every month of 2012 showed year-over-year growth in the number of homes sold, said Ryan Price, a research associate at George Mason University's Center for Regional Analysis. In contrast, only seven months of 2011 had larger sales volumes than the same month in 2010, he said.
"It was a pretty volatile 2011 in terms of sales. … 2012's been a lot more consistent," Price said. "That illustrates the presence of strength in demand in the 2012 market."
The numbers support what builders, agents and homeowners are seeing on the ground throughout the Baltimore region.
"Demand's definitely improved," said Lou Baker, CEO and co-owner of Goodier Baker LLC, a residential construction and development company.
When Goodier Baker acquired 22 lots last April at Worthington Green, a Baltimore County development where new homes start above $1 million, it expected to sell four within a year, he said. Now at least eight will be sold in that time, Baker said.
ReMax Advantage Realty, a brokerage with offices throughout Central Maryland, saw sales increase by about a third last year — to about $1 billion, said Wayne Curtis, the branch manager of the firm's Inner Harbor office, which opened last week. It is the group's first Baltimore office and they chose to launch it, in part, because of last year's improving returns, he said.
"Howard County in particular was very strong last year," Curtis said.
Howard had a 17 percent yearly increase in the number of homes sold, according to the Sun's analysis. It was the largest county-level increase in the region. Only Harford County had fewer sales in 2012 than 2011, but the decline was slight at 2 percent.