Latest Home Figures Provide Reason for Optimism

With the first two months of 2011 behind us, we can only hope that the ongoing trend with the real estate market continues deep into this year and beyond.

With the last phase of artificial stimulation expiring almost a year ago, the market is showing signs of life and stabilization driven by natural factors such as low interest rates and depressed prices.

February yielded 32 sales in the Essex/Middle River area, compared to 30 during the same month in 2010. In Baltimore County as a whole, there were 319 closings, compared to 346 in February 2010—a pretty amazing feat given that last year a large part of the activity was driven by now-expired home buyer tax credits.

Even more encouraging is the number of pending sales. In Baltimore County, 975 listings went under contract in February 2011. That’s only five less than during the same period of 2010, and 69 more than in February 2007.  Yes, 2007. 

Needless to say, not all of these pending listings will close for various reasons. It does show, however, the willingness of buyers to submit offers and for sellers to accept them.

At the end of February 2011, there were 4,052 active listings in the Baltimore County and 415 in the Essex/Middle River area, resulting in almost 13 months of inventory for both regions given the month’s transaction level. Six to eight months of inventory is considered to be a stable market.

Median price for properties sold in the county as a whole climbed from January by almost 5 percent. Compared to the previous February, it slipped by almost 6 percent. It will be interesting to see how this trend develops through the year. Although we fully expect the median prices to be lower compared to last year’s roller-coaster ride, it wouldn’t be too surprising to see more stability in prices from month to month. In most areas of the county, we’re seeing price levels equaling those of pre-boom time frame.

Out of 319 sold homes in Baltimore County last month, 68 were bank-owned and 23 were short sale listings. Distressed sales made up almost 30 percent of the entire transaction level. We can expect this figure to remain steady given the large number of distressed homeowners in the region and the county as a whole. Furthermore, we can expect the distressed transactions to offer more value to potential buyers given the nature of the situation.

Average stay on the market, in Baltimore County, increased drastically in the month of February to 148 days, compared to 114 days in January 2011 and 121 days in February 2010.  Last month, sellers in Baltimore County received about 88 percent of their asking price on average.

Overall, the month of February this year looked relatively stable compared to the previous six months in terms of overall market activity and median prices.  Somewhat mild weather allowed for buyers to get out and see properties, resulting in a high level of newly pending listings in the region. 

Sellers are continuing to price their homes to market rather than their wishful thinking. And finally, the interest rates, although a bit higher than late last year, are still very low by historical standards and are forcing first-time and move up buyers to take advantage of them.

I cannot wait for March's data.

Do you have any real estate-related questions? Do want them answered by an expert Baltimore realtor? E-mail them to Vlad@BaltimoreRealEstateExpert.com.  Selected questions and answers will appear monthly in this section of Essex.Patch.com.