TRI-STATE — Your house has been on the market for several months, maybe even a couple of years.

What’s the chance of it selling anytime soon?

Experts see at least three economic keys to watch this spring and summer — the home buyers’ tax credit program, mortgage rates and new hiring.

Amid the uncertainty, an indicator of future sales issued by Metropolitan Regional Information Systems Inc. (MRIS) looks encouraging for much of the Tri-State area through April.

The latest MRIS data indicates the high number of contracts signed, but not gone to settlement, in January was going to strengthen sales in Washington County through March, according to a Herald-Mail review.

Unexpectedly, the number of deals nearing the final stage throughout the area in February — when snowstorms paralyzed the area for weeks — was almost as strong.

So overall, the sales forecast is looking better through April for much of the area.

But how things will play out into the summer and beyond depend on national economic forces.

“That’s a good trend,” said Frank Getz, vice president of the Pen-Mar Regional Association of Realtors. “It takes time for things to recover.”

Getz said a lot has changed over the past few years, with the real estate market going from boom to bust and now, maybe, inching back again.

“It’s a fast-moving train. Then, you’ve got a train wreck,” he said. “Now, we’re trying to get it back on track and do it the right way. Otherwise, it’s not going to help in the long run.”

Some good signs

Home sales have fallen far since the heady days of 2005, when in Washington County, the market soared to a record high. In all, $578 million in deals were recorded.

Here and across the nation, the picture began to darken when consumers realized the riskiness of subprime loans, which had fueled many of the sales. Loan credit standards tightened, “foreclosure” and “short sale” became household words, and sales kept falling.

As the nation officially slipped into recession in December 2007, the unemployment rate was worsening and consumer confidence was dropping. As home prices fell, more Americans became upside-down on their mortgages — they owed more than their houses were worth.

Enter 2009 and the federal tax credit programs that Congress created and now has extended for first-time home buyers and broadened to include some homeowners who want to buy again.

In Washington County, the turnaround began last October and continued into November, rising each month over sales in October 2008 and November 2008. It was the first time in almost four years that sales had increased two straight months.

Again, in December and January, the rebound continued. Sales rose to $20 million — a whopping 83 percent higher — in December than in December 2008, and to $12.9 million — a more modest 21 percent higher — in January than in January 2009.

And according to MRIS figures released last week, sales climbed again in February, but the snow clearly was a damper. Even so, February sales totaled $9.2 million, which was 5 percent higher than in February 2009.

Loss in momentum

Economists have been tying the sales recovery to federal tax credits offered to first-time home buyers who completed deals by Nov. 30, and now, to first-timers as well as to some who are buying their second homes.

First-timers can receive up to $8,000 and repeat buyers up to $6,500. To qualify, they must have a signed contract — although not necessarily gone to settlement — by April 30.

The National Association of Realtors (NAR), which represents 1.2 million members in real estate industries, has been predicting sales would continue rising through at least April.

So it was quite a surprise this month when NAR’s latest Pending Home Sales Index, based on sales contracts signed in January, fell 7.6 percent. Most pending home sales go to settlement about a month or two later.

January’s index “is certainly disappointing,” Lawrence Yun, NAR’s chief economist, said in an interview on the association’s Web site at www.realtor.org/.

“The momentum we saw end of last year, when we saw that huge surge, we did anticipate that it would be coming down from that level. But I did not see that, this degree of loss in momentum,” Yun said.

“The current activity is very weak. We know there is tax credit available for the first-time buyers and for repeat buyers, but so far, very little energy and excitement about this,” he said.

Walter Molony, an NAR spokesman, said his association doesn’t know why January’s index was weaker than expected.

Molony said it could be that the index “is more volatile this time of year because there’s a smaller number of sales” or because the index only began in 2001 — “young” by some measuring standards.

Or, Molony said, the weakness could signify fresh economic troubles.

“Are we having contracts falling through? Are lenders asking for more documentation? We don’t know,” Molony said.

NAR already was expecting its index for February to fall because the snowstorms kept people from house hunting, he said. February’s index won’t be ready for release until April.

But “February, definitely, will be weak because of the abnormal weather conditions that affected so much of the country,” Molony said. “We had a couple weekends in that month that were taken out of consideration (for sales) in a good swath of the country.”

Nonetheless, Yun said, the approach of the April 30 tax credit deadline probably will spur the market very soon.

“We will see weak near-term sales followed by a likely surge of existing-home sales in April, May and June,” Yun said.

‘Pending’ sales

NAR’s index is nationwide.

The closest such indicator for each county in the Tri-State area is provided by the MRIS data. Its monthly sales reports list the “pendings,” which is the sum of the number of signed contracts and those having “contingencies.”

These might include a potential buyer’s need to sell his or her existing house in order to afford the new one, or the need to have the new house inspected before settlement.

The “pendings” are considered likely to go to settlement in 45 to 60 days.

Though NAR, MRIS and the local Realty association agree it would be good to know how many “pendings” don’t usually make it to the settlement table, none of them examines the records that way.

This so-called “fallout rate” is believed to be “4, 5 percent or less” of the pending contracts in healthier economic times, Molony said. “We believe it’s elevated now” because mortgages have been harder to get during the recession, he said.

MRIS, which uses reports from area real estate agents in compiling monthly summaries, covers Maryland and Washington, D.C., and parts of Pennsylvania, Virginia and West Virginia.

Its “northern region” includes Washington and Frederick counties in Maryland, Franklin and Fulton counties in Pennsylvania, and Jefferson, Berkeley and Morgan counties in West Virginia.

In that region in January, there were 649 “pendings” — nearly 30 percent more than the 500 pending in January 2009, according to the Herald-Mail study.

In February, the pendings dropped to 598, which was nearly 7 percent more than the 560 deals pending in February 2009.

For Washington County alone, the pending deals rose 15 percent in January compared to those still in the works in January 2009, according to the Herald-Mail review.

That means that in addition to the 71 homes sold in Washington County this past January, sales were pretty far along for 95 others. Most of those should have resulted in final sales in February and March.

In February, however, when the snowflakes flew, just 57 homes were sold, according to the latest MRIS report. At the same time, the number of pendings slowed to 92, down a tad from the 98 pending in February 2009.

What’s intriguing is that the market was robust in Franklin County in February despite the snowstorms.

There, the actual sales totaled 63 homes — 21 percent more than in February 2009. And the sales pending this past February increased to 108 homes — nearly 15 percent higher than still were in the works in February 2009.

Actual sales had slowed in Franklin County in January, falling 14 percent to 54 homes. At the same time, however, the number of sales pending rose 10 percent to 96.

And in Jefferson County, sales surged 80 percent in February. In all, 38 homes were sold there that month.

The number of sales pending — likely to go to settlement in March and April — held steady at 54 in February, compared to 57 in February 2009.

In January, sales had also jumped in Jefferson County, rising 56 percent, to 36 homes sold. Likewise, the number of sales in progress increased 48 percent, to 55 homes.

Eyes on the Fed

Around here and on the national scene, a lot of eyes will be focused on mortgage rates after March 31.

That’s when the Federal Reserve, which also is known as “the Fed” and is the nation’s central banking system, has said it will stop buying mortgage-backed securities. These are pools of mortgage loans that are sold as investments, making money available for financing more mortgages.

This has helped keep the interest rates low on mortgages, Molony said.

Some observers fear that as the Federal Reserve pulls back from such investments, the supply of money will fall and interest rates will rise.

Not to worry, economist Yun said.

“What we have been seeing in recent weeks (is that) as the Fed has decelerated the level of purchases, the private market has stepped in,” Yun said.

As long as that trend continues, mortgage rates can remain at affordable levels, Yun said.

“I don’t anticipate any spike in mortgage rates just because the Fed steps away because the sign is that the private investor is willing to step in to the mortgage market, keeping the rate at these historically low levels,” Yun said.

In addition to mortgage rates, many observers also will be watching to see whether and when companies begin expanding their work forces.

The nation’s unemployment rate held steady at 9.7 percent in February and January, after reaching 10 percent in December. Maryland announced last week that its jobless rate in January rose slightly to 7.5 percent, from 7.4 percent in December.

The jobless rate in Washington County was 9.7 percent in December, compared to 9.5 percent in November. Late this coming week, Maryland expects to announce each county’s rate for January.

As the tax credit program ends, many observers hope that employment will begin to increase and the housing market won’t falter.

“The real question is what happens in the second half of the year,” Yun said. “If there is sufficient job creation, housing can become more self-sustaining with stable to modestly rising home prices because inventory has been trending downward.”

And Maryland’s job market is likely to start growing in the second half of this year, state Comptroller Peter Franchot told Gov. Martin O’Malley in a report released this week.

But any improvement will be slow, Franchot wrote.

“The recession may be over, and Maryland’s economy has not contracted as much as the national economy, but the effects of the recession will linger,” he said.

“Maryland employment is expected to decline through the first half of calendar year 2010, although at a moderating pace,” Franchot said. “Growth will resume towards the end of the year, though it is expected to be sluggish through 2011.

“When final figures are released, growth in personal income for 2009 is expected to have been the worst since 1954, due largely to stagnant wage income. As employment begins its slow recovery, wages will as well, but a return to relatively healthy growth is not expected until 2012.”

A little help

So what does Getz, the vice president of the Pen-Mar Regional Association of Realtors, think is going to happen in the local housing market this spring and beyond?

“You’ll have your spring bump when people walk in front of the house and see the spring flowers,” Getz said. “And as the days get longer and you change the clocks and people get more outside,” home sales will increase.

But clearly, the biggest factor right now is the tax credit program and then, the job market, Getz said.

“I think you’re going to start to see confidence in the economy,” he said. “Things are going to start to turn around. Again, that’s my positive attitude.

“I know the job market is really tough. Whew! It’s unbelievable.”

The economic improvements he envisions accompanying mild weather “may not be a big jump or anything like that,” he said. “I think it’s going to be more stabilization. It’s not going to be big, but it’ll be enough to help with the rest of our economy.”

And what are you telling your home-seller clients right now?

“As long as you price them right and you get people to look at them, that’s good. Otherwise, it’s just going to sit,” he said. “You can’t sell it unless you show it.”

“You have to be realistic,” he said.