Baltimore Area Real Esate Trends for 2008

The Metropolitan Regional Information System is a Multiple Listing Service that primarily services Maryland, Northern Virginia, and Washington DC. Essentially, they are the major provider of residential real estate listings in the Baltimore regional area. As such, they keep detailed statistical records of real estate transactions in the area and provide public access at http://www.mris.com/reports/stats/ and are the main source of the statistical information that follows. Additionally, they have launched a new listing database; HomesDatabase, which appears to be even more comprehensive than Zillow, except the MRIS listings omit the days on market information.

As an eventual prospective buyer, I periodically look at local online listings to get an idea how areas of interest are being priced. Yesterday, when I looked at Zillow and the HomesDatabase, I was surprised to see a distinct increase in listings in certain areas of Baltimore County. Thus, I became curious about how the the local real estate market performed in 2008. Below is a table of the year over year statistics for both Baltimore County and City.

As you can see, the mean sales price decline for the City and County were relatively benign, with the City actually increasing nominally. Considering the economic carnage that we've seen in the last year, I assumed these figures would be much larger. However, the number of units sold was down significantly in both areas, which, of course, caused the aggregate sales volumes to decrease. It would appear that sellers and prospective buyers are diverging on their idea of fair value and this is confirmed by the increase in the days on market for both the City and County.

If prices didn't decline but sales did in 2008, does that mean that sellers are patiently waiting for the market to rebound? Or do sellers have so little equity, due to flaky loans and little down, that they can't absorb even a small decrease in price? I imagine the answer is a combination of the two and that it varies by neighborhood.

If you would like to see where the above tabulated data comes from, keep reading. Below is a month over month (2007 vs 2008) comparison of various residential real estate statistics for Baltimore City and Baltimore County.

1. Mean Sales Price: Baltimore City's graph fascinated me because the 2008 spring and summer mean prices exceeded those of comparable 2007 months. I double checked the data provided by MRIS and that is the way it was reported. Consumer prices peaked during August 2008, due to the oil bubble, but it's difficult to envision that being a motivator to live in the City. Baltimore County didn't show the same behavior, with every month except February and May being lower than its 2007 predecessor.

2. Units Sold: The following graphs give the monthly breakdown of units sold in both Baltimore City and County. In both cases, a marked decline is evident with the City sales decreasing more relative to the County.

3. Total Sales Volume: Sales volume is the product of the average sales price and the number of units sold. This value probably provides a more meaningful insight into the real estate market as it encompasses both price and volume changes. From the following charts, it's apparent that both the City and County have seen a significant and consistent reduction in total sales in 2008 compared to the prior year.

4. Days On Market: The following charts show the average days that a house was on the market before selling, which increased consistently in both cases.

5. Relative Month Over Month Change: The graphs below give a summary of the month over month changes in the parameters provided above. For example, Baltimore City's January month over month relative change in Days On Market is: %Difference=[(DOMJan08-DOMJan07)/DOMJan07]x100%.

1 comment:

  1. Wow. I would have thought that house priced would go a lot lower. I guess you can't believe everything you hear.