The four-bedroom, 2.5-bath home on Cromwell Bridge Road in Towson listed in June for $324,900. And lingered.
June Piper-Brandon, a real estate agent with Century 21 New Millennium, and the seller, David Walcher, recently reduced the price by about $25,000. Even so, no one showed up at an open house this weekend.
“We keep dropping the price and hoping,” Piper-Brandon said.
The good news and the bad news in Baltimore’s real estate market is the same for both buyers and sellers: Prices aren’t going up.
Nationwide home prices recovered to pre-housing-crash levels in June, rising 6.5 percent year-over-year after months of steady gains, according to the most recent existing home sales data from the National Association of Realtors.
But the median cost of a home in the Baltimore metro area increased just 1.5 percent last month from July 2014, to $259,900, according to a report released Monday by RealEstate Business Intelligence. And so far this year, the median price has fallen about 1.6 percent and remains about 10 percent off the 2007 peak.
The affordability may be fueling demand. More homes sold in Baltimore City and the five surrounding counties last month than in any July since 2005, continuing an eight-month streak of year-over-year, double-digit gains. The 3,623 deals were 23 percent more than a year ago. The number of pending deals also rose nearly 16 percent.
But the disconnect between local and national prices coupled with the increased demand may be causing pricing confusion in the Baltimore market.
“I don’t know too many markets in the country that look like Baltimore,” said John Heithaus, the self-identified “chief evangelist” for RealEstate Business Intelligence, the affiliate of the region’s multiple listing service that produces the monthly housing analysis. “Clearly, yes, for the entire [mid-Atlantic] region, [prices in] the Baltimore metro is certainly lagging, but what we want to see is increases in sales.”
Piper-Brandon said some homeowners have gotten encouraged to sell as more emerge from being underwater. But many prospective buyers are still backing away and opting to rent.
“We’re certainly seeing people going back to work, but they’re not making as much money as they used to make,” she said.
After dropping the price on his home, Walcher, 48, said his family is in no rush — they just found a bigger home with a pool they liked more. They bought the property from a bank after a foreclosure, so there’s some wiggle room.
“I think this may be an opportunity for somebody to take advantage of the situation we’re in and get a good deal that might not be available at other times,” said Walcher, an insurance agent. “If it doesn’t sell, OK, I had planned to live here for 20 years anyway.”
Danielle Hale, the National Association of Realtors director of housing statistics, said price increases nationally reflect pressure created by relatively low inventories and rising demand. However, she said, demand remains lower than expected, given population growth, which some observers chalk up to slowly rising incomes, more renters and fewer people creating new households, among other factors.
Those dynamics are part of the story in Maryland, where job creation and income growth have lagged behind the rest of the country in recent months. The region’s stagnant prices also reflect a continued churn of distressed properties, which drag down prices while feeding supply.
Foreclosures and short sales — with a median price of $118,000 — increased 43.5 percent year-over-year in July, to 673, or 18.5 percent of all transactions.
Many of the distressed properties date to delinquencies that started in the recession, and are just now appearing as the market adjusts to regulatory changes. While the situation is improving, Maryland continues to have one of the three worst delinquent markets in the country, according to a recent RealtyTrac report.
“It’s that lingering overhang,” said Frank Nothaft, a Washington-based senior vice president and chief economist for CoreLogic. “The serious delinquency rate has come down a great deal in the Baltimore market. … It’s still really high.”
The delinquent market continues to weigh especially on Baltimore City, where the median sales price was $135,000, the same as in July 2014. Of the 700 home sales in the city, about 200 — more than 28 percent — were short sales or foreclosures, similar to last year’s share, according to RBI.
But the city in July also saw a 17.1 percent increase in closed sales and 11.4 percent increase in pending sales.
“The city seems to have weathered the potential storm of the civil unrest,” said T. Ross Mackesey, president of the Greater Baltimore Board of Realtors. “We still have a huge distressed-property problem.”
John Kaburopulos, an agent with Keller Williams Flagship of Maryland, listed a recently rehabbed two-bedroom rowhouse on Lehigh Street in Greektown for $165,000 at the end of May, but recently dropped the price to $150,000 to try to attract more interest.