During one year of house hunting in Columbia, Kimberly Haynes lowered her expectations and raised her budget.
Initially, Haynes wanted a roomy townhouse for $140,000. But this month, she ended up with a smallish condominium for $155,000. Not only did she pay more than she had planned to but she also paid more than double what the previous owner had two years ago.
"It killed me to do that, but I felt I had no choice," said Haynes, 27, a single professional who works with refugees at a nonprofit organization in Washington. "It just doesn't make sense for me to rent anymore."
Like Haynes, many people looking to purchase their first home are having a tough time in Howard County. Spurred by relatively low interest rates, they are rushing to buy at the low end of the market before they get priced out altogether. But they're searching at a time when the demand for moderately priced homes is growing while the supply is shrinking.
The Howard County Association of Realtors crunched numbers for The Washington Post that demonstrate how that situation affects the pricing of less expensive homes.
The most obvious trend is that there's not much to choose from beyond condominiums. Last year, 759 non-condominiums in the county sold for less than $200,000, said Patty Smallwood, the group's president. This year, 205 non-condominiums sold in that price range through September. It's unlikely that the last three months of the year, which tend to be slow, will close the gap, Smallwood said.
The tightest segment of the market appears to be single-family houses. Last year, 95 single-family units sold for less than $200,000. This year's total so far: 22.
The scarcity of available houses has driven up prices, which increased $35,000 to $45,000 on average in the past year for those less than $200,000, Smallwood said.
For instance, a two-bedroom, one-and-a-half-bath townhouse with no basement sold for $111,999 on Sept. 29, 2003, in the Whiskey Bottom complex in Laurel. A similar house next door, with the same amenities, sold for $160,000 a year later, Smallwood said.
Situations like this exist in other pockets of Maryland, which ranks last in the nation in affordable houses, according to the National Low Income Housing Coalition. But prices in Howard County often defy consumers' expectations, especially for those who move from other states, real estate agents and buyers said.
"Historically, the Baltimore region has been perceived as one of the lower-cost areas on the East Coast," said Jay Hierholzer, a real estate agent with Coldwell Banker in Ellicott City. "But because of its strategic location between Washington and Baltimore, Howard County's prices have escalated more than some other counties' in the region." Its top-rated school system only pushes prices higher.
Part of the problem is that people who live in lower-priced homes are not "buying up," said Julia Mattis, a real estate agent with Re/Max Allegiance. They have trouble finding houses in the next price bracket, from $350,000 to $450,000. Even if they do, they won't be able to get as much as they would have in previous years. So many are not moving to make room for others.
"Everyone is running around saying, 'Oh my God, my house is worth so much money!' " said Mattis, who is also treasurer for the Howard County Association of Realtors. "But the only people moving are those who have to because of divorce or relocation or because they are ready to pay $700,000 or more to buy their dream home."
Mattis said she worked with 10 couples in the last half of 2003 who wanted to sell their townhouses or single-family homes in Columbia and buy more spacious homes. Four decided to stay put, she said.
The housing crunch also is linked to growth control measures in place since the early 1990s that limit the number of housing units built in the county each year, said Jeff Bronow, research chief at the county's Planning and Zoning Department. In 1990, the limit was about 2,500 units annually for sale or rent. In 2003, the limit dropped to 1,500.
"The controls are in place because we want to spread out development over time," Bronow said. "The numbers each year have to be reduced, given that there's not a lot of land available."
In Columbia, where 40 percent of the county's population resides, there's only one major parcel left to develop. It consists of 63 acres owned by Rouse Co. adjacent to Merriweather Post Pavilion. The county in January rejected Rouse's request to increase the housing density limits in Columbia, which would have cleared the way for the company to develop 1,600 housing units on the site. Rouse is appealing the decision in court.
As developable land gets scarce, the focus shifts to building more units on the land that's left. In the near future, two-thirds of newly built units for sale or rent will be apartments or townhouses, while one-third will be single-family detached houses, a reversal of the current housing mix, Bronow said.
Against this backdrop, some residents are giving up on Howard County and moving to neighboring areas. Among them are Jose and Sandra Calderon, who rented an apartment in Columbia for five years. Jose Calderon supervises a landscaping crew in Columbia, and his wife oversees a housecleaning crew at a commercial building, also in Columbia. She also cleans houses part time.
The couple initially wanted a single-family house in the county so they could live near where they work, Jose Calderon said. They also relished the idea of eventually having their 3-year-old daughter, Brittany, attend Howard public schools.
The Calderons said they were prepared to pay $220,000. But after a quick overview of the housing market with their agent, Nora Heinz, they abandoned Howard and landed in Baltimore County. They bought a three-bedroom ranch-style house with a yard in Catonsville, in southwest Baltimore County, for $215,000, about $5,000 more than the asking price.
"They would never get anything like that in Howard County," said Heinz of Arrington and Associates at Long & Foster Cos.
Ed Gold, president of the Home Builders Association of Maryland, said that about 10,000 families in the Baltimore region, which includes Howard, are forced to live outside the area in which they work because of a lack of affordable "workforce housing," meaning homes for nurses, police officers, teachers and couples such as the Calderons.
"We keep hearing about how wonderful the economy is doing as if we all have these built-in engineering jobs at [the National Security Agency]," said Gold, who is also president of Ryland Homes' Baltimore division. "But who helps those engineers? You think Johns Hopkins only hires MDs and PhDs? Of course not. There are a cadre of people who support them. Where will those people live?"
State and local officials are attempting to address that question. Howard County recently mandated that about 10 to 15 percent of houses for sale or rent in certain high-density zones be moderate-income housing. But critics decry that approach, arguing that developers end up raising prices on other units to make up for their losses on affordable housing.
Also, the state offers a break on the "transfer tax" for buyers who purchase property in Maryland for the first time, said Phil Glover, a home mortgage consultant with Prosperity Mortgage in Columbia. In Howard, the transfer tax is 2 percent.
Also, most mortgage companies offer programs with low or no down payments. "But most sellers are leery of accepting an offer with those terms because they wonder about the financial ability of the buyer should something go wrong," Glover said. In this market, they often lose out to buyers with more conventional 3 or 5 percent down payments, he said.
Beth and David Prensky don't have that kind of money to put down. The houses they would consider buying in Columbia typically go for $400,000 and up even though they are "nothing fancy," said Beth Prensky, 28, an advertising sales representative.
Together, Prensky and her husband, who owns an automobile detailing business, earn about $80,000 a year. The couple considered several financing options, but many plans would require them to pony up a $2,000 monthly mortgage, almost double what they want to pay.
So they've decided to keep renting until they have a decent down payment.
"What's another year at this point?" Beth Prensky said. "I want a house that's a keeper, and I'm willing to wait for it."