Aaron Cahall, The Examiner
2008-05-07 07:00:00.0
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BALTIMORE -

There have been a few months of falling prices, and hopeful Realtors say they’ve seen a little more traffic at open houses this spring. Both may be positive signs, but several real estate experts said they expect the residential housing market to continue its slide into 2009.

The first sign of a market downturn dates back to early last year, when sales volume began slipping across the Baltimore area, according to Anirban Basu, president and chief executive officer of the Baltimore-based Sage Policy Group.

As sales slipped, active inventory grew, which has contributed to price decreases.

“Now the question becomes, when does the buyer regain a sense of urgency?” Basu said. “When do they get nervous about the prospect of home prices beginning to rise? I think if you talk to most prospective buyers out there, that’s not something they’re worried about.”

The median sale price, the price in which half of all home sales fell below and half above, was $259,900, down 3.2 percent from March 2007, according to data collected by Metropolitan Regional Information Systems Inc., a Realtor-owned information service. It was the fifth straight month of decline.

The MRIS data, reported by Realtors, are the only real measure of local real estate data. But Stephen Walters, a professor of finance at Loyola College, cautioned against putting too much stock into any one month of data. He said monthly data could be easily influenced by small surges of activity that might not represent overall trends.

Instead, Walters pointed to the amount of active inventory as a key indicator.

“It’s going to be 2009 before we start talking about seeing the light at the end of the tunnel,” he said. “Some months we may see slight improvements and some months slight declines, but when you average it out,” the downward trend continues.

Recent price declines have more to do with disappearing sales at the high end of the market, which drive the median sale price figure down, rather than sellers cutting their prices, said Paul Cooper, vice president with Alex Cooper Auctioneers. Instead, Cooper said cutting the skyrocketing number of foreclosures would mark the formation of a bottom to the market.

“If fewer and fewer properties are in foreclosure, that will be good thing, that will be a turn,” he said.

acahall@baltimoreexaminer.com