A slower Baltimore housing market, but with stable home prices, is expected to continue through the fall, real estate experts said.
“My take on that is that it?s definitely cyclical ? we?re just coming back from a market that was unrealistic,” said Cathy Werner, president-elect of the Greater Baltimore Board of Realtors. “We had appreciation that was as much as 35 percent a year. That can?t continue. We had people paying too much for their house.”
The number of homes sold in August dropped 17 percent from the same month last year, and the average time on the market for a home increased from 58 days to 84 days, according to data released Monday by Metropolitan Regional Information Systems.
Werner, broker of RE/MAX American Dream, said her agency has told clients to expect to wait 100 days to sell their home and to realize that it?s a buyer?s market. However, she added that the area?s stable home prices mean property is keeping its appreciated value.
Some concern may come from newer brokers and Realtors who saw unusually good times, said Ilene Kessler, president of the Maryland Board of Realtors.
“Most of my real estate career, it?s been like this,” she said.
Kessler said one-half to two-thirds of the board?s members have been in real estate for 10 years or less.
“It?s going to be a few years before things really get going again,” said Deborah Ford, professor of finance at the University of Baltimore.”I think the last five years have been a unique experience in real estate, not cyclical, with prices moving very fast.”
Driving that hot market were changes in lending rules, allowing those who would not have otherwise been able to buy to do so, as well as a shift in investments from dot-coms to real estate. At one point, approximately 60 percent of transactions in Baltimore involved non-homeowners. Those investors bought high but may face problems trying to flip their properties, she said.
“I think that?s probably the key to the city, what are these investors going to do,” she said. “Never mind profit; they have to sell high enough to pay off the mortgage.”
