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November 8, 2009

Baltimore-area new condos: Lots to go around

In the market for a new condo? You've got a lot choose from in the Baltimore metro area.

Delta Associates, a real estate information and consulting firm, counts 2,586 unsold units -- enough to last six-and-a-half years at the current pace of sales. And that's not all:

In addition, there are 1,111 units planned with probable sales within the next 36 months. There are an additional 3,200 units in the long-term pipeline in the Baltimore metro area, as well as 6,100 multifamily units planned as either condominiums or rental units.
But it could be worse, or rather it has been: "The inventory-to-sales ratio of condos in the Baltimore metro area has dropped significantly over the past six months," Delta notes.

All told, builders recorded 32 net sales in the Baltimore metro area during the summer, Delta said. The "net" is important -- it accounts for the negative effect of buyers canceling contracts.

Prices in September fell about 7 percent vs. a year earlier across the metro area. The decline is less in the city -- about 5 percent -- and more than 10 percent in the northern suburbs, Delta said.

Posted by Jamie Smith Hopkins at 7:00 AM | | Comments (5)
Categories: Housing stats


Net sales of 32 units? For the entire summer? That is just ridiculous. How is that any sign of a turnaround? There is just too much supply of condos to support current price levels. Prices have to go down further to unload this inventory of unsold condos sitting on the market. It is a shame that sellers still think their home is worth a lot more then it really is. As more and more homeowners realize they are underwater, you will continue to see "strategic defaults", as it will take at least 10 years to recoup their losses. The Debt Forgiveness Act was enacted for this very reason. Homeowners should take advantage of walking away while they can so they are not held liable for the banks loss. The housing market is no longer a get rich scheme or a way to make a quick profit. Millions of people bought at the peak and are left holding the bag. Even when prices do stabilize, prices will only go up 3% to 5% per year. People will continue to be buried in debt until they face reality and admit there is no way to pay back an asset that is worth 30% to 50% of the value when they originally purchased. When rates go up, values will fall even more. As lenders continue to tighten their underwriting guidelines, less people will qualify for a loan. I am afraid we still have a long way to go before things get back to "normal".

How much is the inventory going down because the owners can't sell, so they turn them into apartments?

There's new construction on Charles that they'd been trying to sell as condos, but I know someone who just moved in to an apartment there because the builder sold perhaps one floor.

Justine, I haven't seen any recent stats on reverse conversions by builders -- condo to apartment rather than apartment to condo. But it's certainly happening.

I brought this up before, but I remember as a youngin when we saw a much smaller condo boom. The builders finally unloaded the units with auctions. There were auctions at the Colonnade, Scarlett Place and others.
Now, they built so many more condo units, and you knew it was a disaster waiting to happen.
I would be curious how many units are truly sold at Silo Point or the tower on Water Street.

When I was looking to buy, the condos didn't have an appeal because of high condo fees. The figures simply didn't add up, compared with buying a lovely townhouse in a similar price range.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie

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