State’s foreclosures climb again as home sales fall

Prince George’s still tops in state; retailers struggle with ripple effect

Across Maryland, foreclosure filings rose by 343 percent from a year ago to 4,275, significantly higher than the national rise of 57 percent, according to data company RealtyTrac. Existing home sales dipped by 37 percent to 3,704 in Maryland in March, according to the Maryland Association of Realtors.

While sales were down and active inventory was up from a year ago, median sales prices were fairly stable, said Debbie Hager, a spokeswoman for the Realtors group. The median sale price of an existing home in Maryland last month was about $284,000, only 6 percent lower than a year ago, which was less than the national drop.

Twenty of the 24 jurisdictions in Maryland saw median prices decline, as only Baltimore City and Kent, Worcester and Garrett counties bucked the trend with increases.

‘‘Low interest rates make it attractive for buyers,” Hager said. ‘‘It’s certainly become a buyer’s market.”

The housing slump is dragging down the economy, affecting almost every sector, as many consumers and business executives have become more cautious in their spending, economists say. That’s particularly of concern to retailers, said Thomas Saquella, president of the Maryland Retailers Association.

‘‘Retail sales are hurting,” Saquella said. ‘‘People are spending more on energy costs and watching their money more. The housing situation sure doesn’t help.”

Nationally, unadjusted retail sales — excluding vehicles, gasoline and food at restaurants — dipped about 1 percent in March from a year ago, according to the National Retail Federation.

Retailers more directly affected by the housing slump are having an even tougher time. Sales at furniture and home improvement stores nationally decreased by 10.2 percent, while revenue at building material, garden equipment and supplies stores declined by 9.6 percent last month from March 2007. Meanwhile, some categories saw increases, such as health and personal care stores sales rising 2.8 percent.

Sales are down so far this year at Furniture America in Rockville, but the store is not hurt as much as some others because it recently changed its focus to youth furniture, said David Deignan, general manager.

‘‘Children go from cribs to small beds to larger beds,” said Deignan, whose store is in its 22nd year. ‘‘The new focus has been working out for us. ... Solid wood furniture sales have also been good.”

Foreclosures rise more in Montgomery, Frederick

Home foreclosures in Montgomery and Frederick counties increased in March by more than 530 percent from a year earlier — more than the state leap. Washington, D.C., saw the largest percentage increase among Maryland’s neighbors, while two, Pennsylvania and West Virginia, had declines in foreclosures.

The state jump was actually the lowest in almost a year, since a 145 percent rise last April, according to RealtyTrac. Nationally, bank repossessions increased in March much faster than auction notices, indicating that more homeowners are walking away from their homes, said James J. Saccacio, CEO of RealtyTrac.

This month, Gov. Martin O’Malley (D) signed some emergency bills that supporters hope will help stem the foreclosure tide. The legislation increases the period before a foreclosure can be finalized from 15 to 150 days, enacts new penalties for mortgage fraud and bans mortgage rescue scams. The laws took effect this month.

Lawrence Yun, chief economist for the National Association of Realtors, said in a report that he expects existing home sales to rise again ‘‘within a few months, unless there are some additional economic problems or excessive inflationary pressure.”

Existing home sales nationally were at a seasonally adjusted annual rate of 5.03 million units in February, some 24 percent below the level in February 2007. Sales of new single-family houses in February were at a seasonally adjusted annual rate of 590,000, some 30 percent below the level a year earlier, according to federal estimates by the U.S. Census Bureau and the Department of Housing and Urban Development. Housing starts and completions for March were also well below a year ago.

‘‘The wider access to affordable credit should increase sales activity notably this summer as pent-up demand begins to be met,” Yun said.

Bankruptcy filings also up

Business bankruptcy filings in federal courts in Maryland also rose by 14 percent last year to 380 from 2006, but that was lower than the national increase, the Administrative Office of the U.S. Courts reported this week. Business-related filings in Maryland were down significantly from 2005 when 760 business-related filings were made.

Nationally, business bankruptcy filings rose by 44 percent last year to 28,322. But that was down from 39,201 in 2005.

This report originally appeared in the Business Gazette.

Foreclosure help

Maryland residents facing foreclosure can seek help from the Maryland Department of Housing and Community Development bycalling 877-462-7555 orat www.mdhope.org.