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RBI November Market Update: Baltimore Metro Sees Highest Proportion of Condo Sales on Record, DC Metro Demand for Townhomes Remains Strong

December 10, 2012  |  by Corey

The following analysis of the Baltimore, MD and Washington, D.C. Metro Area housing markets has been prepared by RealEstate Business Intelligence (RBI) and GMU Center for Regional Analysis, and is based on November 2012 MRIS housing data. Click here to view the full releases.

Baltimore Metro: Slow and steady gains persist for several key indicators relative to last year; Highest proportion of condo sales on record for the Metro area

Low supply of active listings keeps prices stable and slowly rising, Seller participation in the market remains low

OVERVIEW

Activity in the Baltimore Metro housing market remains steady, up slightly from last year, but the rate of year-over-year growth is slower than earlier in the year for many indicators. Historically sales decline between October and November, but the uptick in new contract activity last month led to a rise in sales in November. Year-over-year growth in new contracts remains, but is down considerably across all property segments this month, which could be an indication of cooling market demand. Condos continue to increase market share, reaching their highest proportion of sales on record in November. Easier financing options and lower price points are likely playing a role in the observed condo growth. The inventory of homes for sale continues to decline, however new listings appear to be on an upward trend.

The low supply of active listings are keeping prices stable and rising slowly across the metro area. Buyer demand has been improving but seller participation in the market remains low. This is due to both economic uncertainty and potential equity losses in many areas. With the Federal Reserve’s September announcement of continued low interest rates through 2015, it is feasible that many buyers will wait it out until more options become available in the market. This could mean slower sales and stable prices in the near-term.

DC Metro: Sales spike from last year, though new contracts have fallen slightly; Demand for Townhomes remains strong causing the median sale price to jump $54K

Low supply of homes for sale puts pressure on median sales prices, Townhomes lead all segments in sales growth

OVERVIEW

The surge in new contract activity last month translated into a rise in sales for November. Sales are higher than last year, but new contracts are down slightly compared to November 2011. This could be an early indication of tempered demand in the market. The inventory of homes for sale continues to shrink, and new listings remain at their lowest level in over a decade. The low supply is putting upward pressure on median sales prices around the region.

Price gains have been most pronounced in the townhome segment, which has led in year-over-year growth for 3 consecutive months. Townhomes also lead all segments in sales growth, and active inventory declines, which indicates strong demand for these properties. As the year-end approaches, the market tends to slow down, which will likely equate to an even lower supply of homes for sale in the coming months. Buyer demand has been consistent, but seller participation in the market remains low. This is due to both economic uncertainty and potential equity losses in many areas. With the Federal Reserve’s September announcement of continued low interest rates through 2015, it is feasible that many buyers will wait it out until more options become available in the market. This could mean slower sales and stable prices in the near-term.

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