Baltimore Foreclosures Making Plenty of Homes Affordable

by Peter Vernon on cities

The still high percentage of Baltimore foreclosures for sale is making a lot of homes affordable in the area.

In April, home prices in Greater Baltimore declined by 4.2 percent over the year as the share of foreclosures was still high at 27 percent.

In May, the average price also dropped sharply to about $272,000, down by 14 percent from the $316,000 average price in May 2008. Local analysts once said that Baltimore is an overvalued market, but now, the opposite is true because of the downward price effect of both residential and commercial foreclosures.

In May, the numbers show the surge of foreclosures in Maryland over the year and over the month. A total of 5,852 foreclosure actions were counted, marking a jump of 7.5 percent from April and a staggering spike of 65.4 percent from May 2009. This total was comprised by 4,920 pre foreclosures and 932 real estate owned units.

Since the rate of default of mortgages backed by government agencies has spiked nationwide, it is also safe to say that a number of these repossessions are VA homes.

The still high number of Baltimore foreclosures also added to the unsold housing inventory in May, making the supply of houses for sale in May the highest over the past 18 months. During the month, the supply exceeded 19,000 units and another 4,200 are expected to be added.

Local analysts said many home sellers listed their properties in April because they hoped a lot of buyers will beat the deadline of the federal tax credits.

On one major real estate website, there are currently 6,882 pre-owned homes and 4,916 foreclosure homes in Baltimore. The average price hovers between $132,334 and $147,189 and the foreclosures on the front page are listed at $254,000 and $251,577.

Closed home sales increased in May by 26 percent over the year in Greater Baltimore, but pending sales dropped by over 30 percent. It is hoped however that the lower prices due to Baltimore foreclosures and high inventory will help increase sales in the coming weeks.