Baltimore Metro Area Summer Ends with Best August for Home Sales in Five Years
September 12, 2011
Median Sales Price Also Outperformed Seasonal Expectations
Rockville, MD – (September 12, 2011) – The following analysis of the Baltimore Metro Area housing market has been prepared by housing market expert Jonathan Miller of Miller Samuel, based on the August 2011 RBI Pending Home Sales IndexTM released today:
OVERVIEW
Baltimore area home sales enjoyed their best August in five years as buyers took advantage of affordable prices and record low interest rates.
While August pending sales of 2,365 was 1.7% below the July 2011 total of 2,407, the current decline was well below the 6.9% average month-over-month decline of the past 5 years and the 4% average month-over-month decline of the past ten years.
Median sales price also outpaced seasonal patterns, rising 4.4% to $235,000 in August from $225,000 in the July . For the past ten years, median sales price has slipped an average of 0.5% from July to August.
KEY TRENDS
• Signed contract activity in August 2011 outpaced seasonal expectations. There were 2,365 new pending sales in August, 1.7% below the 2,407 total in July 2011. The modest decline was well below the 6.9% average month-over-month decline of the past 5 years and the 4% average month-over-month decline of the past ten years. The amount of signed activity for the month was the highest August total in 5 years.
• The August median sales price unexpectedly increased over the prior month level. The median sales price was $235,000 for the month of August 2011, 4.4% higher than the $225,000 result in July 2011. Median price was expected to slip from the July level, consistent with the 0.5% average ten year month-over-month decline and the 0.7% average 5-year month-over-month decline. Three of the past 4 months have resulted in an increase over the prior month for the metric. Median sales price was 4.1% below the August 2010 level of $245,000 a level that was pressed higher by the federal homebuyer tax credit earlier in the year.
• Lowest active inventory total for August in 5 years. There were 16,265 active listings at the end of August 2011, the lowest total for August since 2006 and 6.7% below the 5-year average of 17,438. However active inventory remains sharply higher than the 12,483 average of the past decade. Active inventory for August 2011 was 3.2% less than the 16,807 total for July, moving in the opposite direction of the 10-year average July-to-August increase of 1.9%.
• The absorption rate slipped as the decline in active inventory outpaced the decline in contracts. The number of months to sell all active inventory at the current pace of new pending sales for August 2011 was 6.9 months, a nominally slower absorption rate than 7 months in July 2011. The monthly absorption rate, a measure of market efficiency, was faster than the ten month rate in August 2010 and 7.5 month rate in August 2009.
• Marketing time and negotiability between buyer and seller saw nominal improvement. The average days on market, a measure of the number of days between original listing date and contract date, slipped 3 days from the July 2011 average of 114 days to an August 2011 average of 111 days. The listing discount, a measure of the percent difference between the original listing price and the sales price was 9.5% for August 2011, unchanged from July 2011. This indicates no difference in negotiating strength between buyers and sellers.
The RBI Pending Home Sales IndexTM is a two-year moving window on the housing market using new pending sales (signed contracts) and median sales price (closed sales). It provides unique insight into the state of the current housing market by measuring the number of new pending sales for each month through the most recent month. The results include new pending sales through and including August 2011. The market area includes: Baltimore City, Baltimore County, Anne Arundel County, Carroll County, Harford County, and Howard County.
ABOUT JONATHAN MILLER/MILLER SAMUEL
Miller is President and CEO of Miller Samuel Inc., a nationally-known real estate appraisal and consulting firm. A well-regarded real estate commentator, who frequently appears in national media outlets including the Wall Street Journal, the New York Times, Bloomberg News, CNBC and others covering national and regional housing issues. He has been named “Best Online Real Estate Expert" by Money Magazine and his stringent focus on neutrality has contributed to his recognition by Inman News as one of the most influential real estate bloggers in the U.S. More information on Mr. Miller and Miller Samuel can be found at www.millersamuel.com or follow him on Twitter @jonathanmiller.
ABOUT RBI
RealEstate Business Intelligence, LLC (RBI) is a wholly owned subsidiary of MRIS. RBI is a primary source of real estate data, analytics and business intelligence for real estate professionals with business interests in the Mid-Atlantic region. The full monthly data report for all jurisdictions in the MRIS region, along with charts and graphics, can be found at www.rbintel.com/statistics. RBI is the only company in the Mid-Atlantic region that provides timely, online access to statistical information directly from the Multiple Listing Service (MLS). Visit RBIntel.com or follow @RBIntel on Twitter to learn more.
