Baltimore-area homes under contract on the rise
Almost 2,000 homes in the Baltimore metro area went under contract last month, deals that will turn into sales down the road if all goes smoothly. That figure, which includes contracts with contingencies, jumped more than 40 percent from a year earlier, according to Metropolitan Regional Information Systems.
Just to put that in perspective: The region saw the most newly signed contracts for a January since 2007, but it's still well below the '07 figure of about 2,400 -- not the mention the 2,600-plus signed in go-go January 2005.
MRIS's stats arm, RealEstate Business Intelligence, now shows how many contracts were signed in a particular month as well as how many deals are pending in total. That's interesting because it helps tell the story of dragged-out sales, the ones that take far longer than the traditional 45 to 60 days to get to the settlement table.
Consider:
In January 2005, 66 percent of all pending deals had been struck that month. That figure hovered around 70 percent for the next few years.
Until January 2009, when wham -- just 58 percent of deals were new.
The next January, 45 percent. Less than half.
Last month, it was back up to '09 levels, though that's still a substantial share of contracts that were signed before January -- months before, in some cases.
What's going on? Short sales can take a long time to get from contract to closing, assuming they don't blow up in the meantime, and there are a lot more of those now than there were four or five years ago. Foreclosures are a lot more numerous, too, and can also drag. Then you have all the other settlement-delaying issues that have popped up with a vengeance in the last few years, from low appraisals that send buyer and seller back into price negotiations to all manner of paperwork snarls.
One couple -- mentioned in this housing-market story -- waited for a large portion of 2010 to close on a short sale only to see it fall apart as the first- and second-mortgage holders bickered. Then they made an offer on a foreclosure, but that settlement was pushed off for several months because the selling bank hadn't completed the required paperwork for the small matter of actually claiming ownership.
Anyone got a personal story to share about a slow (or speedy) journey from contract to closing?
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Comments
Maybe Beverly Banzer was correct and she will get 850,000 for her home (Her agent getting 50,000) . A booming stock market and falling value of the dollar could double home prices in the next few years. This shifting of the debt by Ben Bernanke from Rich to poor seems like it is working out perfectly. Why is this not the economic policy all the time?
Think I may rehab some rowhouses in the city and then sell to someone.
Posted by: Peter Elling | February 17, 2011 11:16 AM
Speaking of contingencies, I've noticed houses for sale with the status: Contingent with Kickout. What does this mean? Does it slow down sale process?
Thanks
Posted by: Matt | February 17, 2011 5:46 PM
Matt, here's a useful description of the "kick out" clause (essentially, it allows the seller to keep marketing the home to other potential buyers): http://homebuying.about.com/od/realestateglossaryk/g/kick_out_clause.htm
Peter, way to keep the Beverly Banzer conversation going. :-D
Posted by: Jamie Smith Hopkins | February 17, 2011 5:50 PM