Prices are increasing and historically low interest rates are creating a seller's market in Baltimore, Maryland, where some buyers are finding they are better off buying new housing than existing.

"Today's market is a very active market," says Realtor Michael E. Wilson. "Prices are still holding steady and increasing with the recent demand for property and historically low interest rates. Buyers and sellers need representation in this kind of market to get the most out of their situation."

Says Realtor Gregory Adair, "Listen up; I'm going to tell you what others won't. Veterans, don't bother bringing your patriotism to the bargaining table during a sellers market, because when it comes to real estate, sellers are patriotic only if it doesn't cost them in accepting a VA offer. Almost every decision on a submitted VA and FHA offer will be turned down by the sellers if a conventional offer is on the table. Approved FHA loan recipients, same notice to you, don't bother bringing it to the table during a sellers market more times than not, your offer will be rejected. We know that VA and FHA loans allow you the means of purchasing more home for the mortgage, but it only works if you are the only game in town. These loans place the seller in positions where they have to pay some buyers' fees and/or pay for work orders from inspections and/or appraisals."

He advises, "If you qualify for a VA or a FHA loan, ask your loan officer how would you fare with a conventional loan. Weigh the options carefully. Here's where we (your real estate agents) are your guide. Realtors, if worth their weight in gold, should provide you with the best option to get the best value of a successful purchase of your new retail home using whichever financing best suit your needs. Don't get me wrong, you can successfully use VA and FHA financing, but its best advantage is purchasing from a real estate developer where bidding wars are rare. My opinion in a seller's market is simple. Sellers rule, it's take all, and give nothing in return unless it beneficial. You will be more successful buying a new home than a resale with a VA and FHA loan."

" Canton/Brewers Hill is comprised of townhomes as old as 100+ years to new construction. Luxury condos are also found along the waterfront and interspersed within the community," says Realtor Dominic Cantalupo. "Currently there are 98 active properties with an average price of $464,746 up from April's average of $441,751. Average days on market is 40, lower than April's 44 days on market. Prices range from $149,900 to $2,500,000. There are 104 homes under contract up from 91 homes under contract in April with an average list price of $351,934, up from $342,618 and DOM has dropped to 32 days versus 40 days on market in April. U/C prices range from $144,900 - $1,100,000. In April 53 properties were recorded as settled with an average price of $285,375 and 54 DOM."

"The May story shows a small drop in settlements with 48 homes at an average price of $319,071 and 51 DOM," Cantalupo continues. "The market is still in favor of the seller and will probably stay that way for some time. Because of all the new development interest continues to be strong. There is some over development in the rehab market mainly caused by the plethora of investors trying to become real estate developers. The cost of shells has made any decent rehab property approach $300,000 or more, while new construction will start around $400,000+. The last quarter ending in May resulted in 162 settlements for an average price of $294,977 versus the previous quarter which had 126 units settle for an average of $288,148. That's a 28 percent increase in units and a 2 percent increase in price."

He says, "Fells Point Butchers Hill contains some of Baltimore's oldest townhomes, and they maintain a stronger hold on historic renovation. There are more commercial segments to this market versus residential areas, although you can find some new construction taking place along the waterfront and condos popping up towards the Inner Harbor. These properties come at prices starting in the $500,000 or more range. There are now 106 active properties up from 78 active properties in April with an average price of $428,901 down from $436,973 the month before. Average days on market are still in the mid 40's. Prices range from $109,900 - $1,350,000. 110 homes are now under contract as compared to 103 homes in April."

"The average list price of these homes are $352,259, up from $315,398 and 36 DOM. Prices range from $59,900 to $1,100,000. In April there were 23 homes sold with an average sales price of $262,959 and 51 DOM. Prices ranged from $55,650 - $950,000. In May, the number jumped to 50 homes sold with the avg. price at $309,896 and 35 DOM. Prices ranged from $139,900 - $850,000. Look for this area to remain hot with development squeezing it from the Inner Harbor East projects and the Canton projects. Demand in this area is picking up and saw an increase of 44 percent in units sold from this last quarter to the previous quarter and an price increase of 14 percent in that same time period."

"This last report covers Federal Hill," explains Cantalupo. "Federal Hill is similar to the other two areas in that it contains mostly townhomes and condos. Homes around its two park areas fetch higher prices than those farther away. The highest prices are the developments along the water, especially Harborview and the Ritz Carlton. Homes closer to Federal Hill Park and the Inner Harbor are also highly priced. The Light Street and Charles Street corridors contain most of the commercial real estate. Currently there are 121 active properties up from 114 active properties in April with a drop in average list price to $468,169 from an avg. price of $496,559 in April and DOM stayed the same. Prices range from $98,500 - $3,200,000."

"There are 82 homes under contract vs.102 homes under contract in April. Avg. list price dropped to $389,306 from $411,502 in April and DOM dropped to 32 vs.47 DOM in April. Prices range from $149,900 to $1,950,000. In March 48 homes sold for an average price of $291,662 and 42 DOM. Prices range from $109,000 - $1,495,000. In April, 61 homes sold with an average price of $339,724 and 48 DOM. May had the same number of settlements, but an increase in average price to $426,310. The range was $159,900 to $1,950,000."

Cantalupo advises, "With the current real estate boom, I don't see any significant slowdown in this area. As a matter of fact, the last quarter showed a 16 percent increase in average settled price and an increase of 48 percent in units over the previous quarter. The push is continuing to come from wealthy purchasers from D.C. and its suburbs. Baltimore's southeastern communities offer a much more affordable alternative to the costly D.C. market."

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Published: June 21, 2005

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