Do worrisome statistics and numbers drive people away from the real estate market? Or do potential buyers and sellers, with a basic understanding of the current market, stay put and drive those numbers further down?
It?s a chicken-or-the-egg question, experts said, but the mass behavior of Baltimore-area residents plays an even greater role in the current housing market.
“We talk much more about market psychology right now than we do of mortgage rates,” said Anirban Basu, chairman and CEO of the Sage Policy Group. “And the reason is because that?s what?s driving the market right now.”
However, the human element has long been a driving force in real estate.
“I think that what happens is first there?s a fear of what will happen, and that creates what does happen,” said Marc Witman, a partner at real estate broker Yerman, Witman, Gaines & Garceau. “Then it builds upon itself until the market corrects.”
One study attempts to match statistical research with human sentiment. Johns Hopkins University?s Edward St. John Real Estate Department is compiling its annual Trend Watch report, which combines intensive interviews of more than 100 local experts with hard data. In the most recent report, released in March, interviewees spoke to the strength of the local job market, and said the market might “take a breather.”
Department Chairman Michael Anikeeff said the next edition of the report is expected early next year.
National media have played a part in heightening concerns, said Cathy Werner, president of the Greater Baltimore Board of Realtors and a Realtor with Re/Max American Dreams in Perry Hall.
“There?s the sense that we can?t buy now because [media are] telling us not to buy. We keep trying to [show] them that all real estate is local. … A lot of it is the herd mentality.”
Witman said eventually sellers across the area will move prices to a low enough point that, en masse, buyers will come back to the market.
“That won?t be a conscious thought,” Witman said. “It will happen over and over and the next story will be, things are up, and more people will jump in.”
