As fewer buy homes, more are trying to sell
Falling home sales aren't good news for would-be sellers. When the number of would-be sellers is rising at the same time, that's even worse.
This is the story in the Baltimore area, points out Kenneth Wenhold, Mid-Atlantic regional director for Metrostudy, a homebuilding market researcher. As sales fell 16 percent in August, homes listed for sale rose about 8 percent.
In raw numbers: About 330 fewer homes changed hands compared with a year earlier in the metro area, but 1,550 more homes were for sale. (Grand total on the market in August: 20,200.)
"Baltimore ... is sliding backwards," Wenhold wrote in an analysis of the resale market. "Listings grew throughout the summer, a time when they typically decline. ... All of the positive gains and trends which were established in 2009 are now gone, replaced with negative trend lines which continue to deepen."
It would take 10.5 months to find buyers for all the homes on the market if sales continue at the average pace of the past year. That average includes a lot of homebuyer-tax-credit months, and most of those credit-fueled deals have already closed.
The D.C. area is -- probably not surprisingly -- better off.
Northern Virginia has 5.6 months of supply, around the number that economists say represents a "balanced" market where neither buyers nor sellers have the upper hand. Home sales didn't fall as far in August as they did in the Baltimore metro area, and new listings didn't rise as fast.
D.C. and the Maryland counties around D.C. have a 7.4-month supply, so the balance of power isn't tipped as far toward buyers there as it is here. (It ranges a lot -- D.C. has less supply than Northern Virginia, for instance.) Sales fell about 9 percent -- less than the Baltimore area -- and the number of homes for sale didn't budge.
In the D.C. area, "contracts have already showed improvements and have begun to stabilize," Wenhold wrote in his analysis.
The Baltimore metro area's housing market has been worse for sellers at earlier points. The last time we saw listings increase at least 8 percent -- as they did in August -- was back in 2008, when sales were falling much faster than they are now. And we had a higher months' supply figure in part of 2009, before the homebuyer tax credit induced folks to snap up some of those homes for sale.
But the market's been heading the wrong direction for those in favor of buyer-seller balance.
"Ultimately we need the number of new listings to go down, as it has every fall with the exceptions of 2005 and 2006, not up," Wenhold wrote. "As long as listings increase, resale inventories in the Baltimore region will never recede to allow the market to recover."