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Baltimore home sales fall after malware attack

A home for sale on Biddle Street in Baltimore. (The Daily Record/Adam Bednar)

A home for sale on Biddle Street in Baltimore. (The Daily Record/Adam Bednar)

The number of closed home sales in Baltimore fell last month by nearly 20% from the previous May after a ransomware attack crippled the city’s ability to process sales.

Baltimore metro area housing market data, via MarketStats by ShowingTime from Bright MLS listing activity, does not attribute the sales slump to the ransomware attack. It did find the median sales price in the city rose more than 5% year over year, indicating the drop in sales is not market-related.

“The decline in sales volume was definitely associated with the ransomware attack. At the onset of the attack, the city’s inability to produce lien sheets pushed back a number of settlements. As workarounds were developed, transactions began moving again — but slowly,” Annie Milli, executive director of Live Baltimore, wrote in an email.

In April prior to the attack, Baltimore recorded 766 sales, which was essentially flat from the year before. Last month the city recorded 698 sales at the peak of the spring market, 18.5% down from May 2018.

The number of closed sales in the metro area fell by 1.6% overall. That number was pulled down by Baltimore’s struggles as well as a nearly 7% drop in closed sales in Harford County.

Meanwhile, the median sale price in the Baltimore metro area reached its highest level in the last decade. The median sale price for a home in the area was $293,000 in May, which is a 6.5% increase from the previous record of $285,000 set last June.

In Baltimore the median sale price of a home increased from $166,250 in May of 2018 to $175,000 last month. That still makes the city the most affordable of Maryland’s major metro jurisdictions.

Maryland’s major metro counties with the highest median home prices were Montgomery County, $467,750; Howard County, $420,000; and Anne Arundel County, $359,900.

Hackers on May 7 hit Baltimore with a virus that encrypted data on servers, shut off access to email and cost the city roughly $18 million in expenses and lost revenue. The attackers demanded what amounts to between $75,000 and $80,000 in the cryptocurrency Bitcoin to restore service.

Mayor Bernard C. “Jack” Young refused to pay the ransom, unlike some cities, saying the Federal Bureau of Investigation advised against paying the ransom.

Initially the city’s Transfer Office could not process deeds, deeds of trust, or property liens. A week after the attack major title insurance companies prohibited agents from issuing title insurance policies for home sales in Baltimore.

Roughly a week later Young said city employees started manually processing sales and accepting requests for lien certificates in person. City staff said employees processed 462 applications for property deeds that week. Normally the city pushes through between 150 and 175 of those applications a day.

The mayor’s staff issued an update on Monday evening regarding efforts to recover from the malware attack.

The backlog of property sales has been cleared, according to the mayor’s office. Property tax bills will go out on time. Banks and mortgage holders are expected to be able to pay the amount owed the city.

About 65% of its 10,000 employees now have the ability to use their computers and send emails. It’s hoped that 95% of employees will have that ability by the end of the week.

 


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