A tale of two jurisdictions' housing markets
So the housing market is looking brighter for sellers in Howard County, as I mentioned yesterday. At the current pace of sales, it would take 5.3 months to find buyers for all the Howard homes on the market -- a pretty balanced supply and demand. Tilted slightly in sellers' favor, if anything. (The rule of thumb for market equilibrium is roughly six months, with more being good for buyers and less, good for sellers.)
Baltimore, meanwhile, has more than 15 months of supply, according to Sawbuck Realty.
Now, I realize that anyone of the opinion that Howard County is a nicer place to live than Baltimore will think these statistics require no explanation. But both situations look more complex to me than, say, several thousand people trying to sell their homes in the city and move to the county that James Rouse put on the map. At least, that's the impression I got from burrowing into the sales data.
First off, plenty of Howard County homeowners trying to sell are ... well, just trying. Though it's the most expensive spot in the metro area, the county isn't bucking the trend of buyers going for the less-pricey stuff.
Would-be sellers there with asking prices in the $700,000s and $800,000s are competing against a nearly 12-month supply, according to Metropolitan Regional Information Systems' figures for August. In the $1 million to $2.4 million range, the supply of homes topped 60 months. And there were no Howard County homes sold last month in the $900,000s or $2.5-million-plus, which means a supply that will last ... let's see ... until the end of time. (Just kidding. At least, you hope I am, if you're one of those sellers.)
But every price category from $150,000 to $450,000 was under five months. The $250,000 to $299,000 range, for instance, is down to 3.8 months. And $400,000 to $449,000? Just 3.2 months. That, my friends, sure looks like a seller's market.
I wouldn't call $400,000 an inexpensive home, by the way, but everything's relative. Two years ago, more than half the homes sold in Howard were pricier.
So, then: What about Baltimore?
It probably doesn't help the city that prices have fallen in the surrounding counties. As the 'burbs got increasingly expensive during the bubble, more people opted for Baltimore. Now, buyers on the fence about urban vs. suburban have more options in the latter category than they did a few years back.
"That's my theory," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors, when I asked him why he thought sales were still falling (modestly) in the city. "There's a high level of choice, and the choices are more affordable now."
But there's another issue to consider, too. Between 2001 and 2005, home sales rose nearly 50 percent in the city. Fifty! That's 3,700 more homes changing hands in '05 than '01. In Howard County, by comparison, the sales increase was less than 10 percent.
Some of the city's sales boom was driven by investors, many of whom weren't planning to hold the properties long term. So that's a piece of the inventory now.
But plenty of regular homeowner-types bought in the bubble years, too. And here's the thing: The average American moves every seven years. You'd expect that a not insignificant number of those boom-time buyers would be wanting to sell now, just because it's been a while. People's needs change. They want a home that's bigger, or smaller, or across town, or in another state.
Oh, and here's one gee-whiz stat: There's about nine months of supply in the city's $1 million to $2.4 million price range, thanks to five homes selling for that amount in August. That can change a lot from month to month, but still -- that's nine vs. Howard County's 60.
In any case, the housing-inventory numbers could be sending a message about buyers' and sellers' opinions on community quality of life, as MrRational suggests in a comment on yesterday's post. Or that might be one of a number of reasons as varied as the ingredients in a good stew. The real test, I suppose, is where the people who are trying to sell in Baltimore end up buying, once all is said and done. And what happens to the folks with pricey homes on the market in Howard County.
Are you buying or selling in either Howard County or Baltimore City? Why, and what have you noticed about your local housing market?