Maryland real estate market update: Q4 2021, by Emerick Peace.

By Emerick Peace

Maryland real estate market update: Q4, 2021

For the past two years, the real estate market has been surging, so fast that people couldn’t keep up with it any longer. Finally, Q3 saw the market take a breather that was a long way coming! The demand was none like we’ve seen before and not just in Baltimore, but all around the country!

Perhaps one of the main reasons behind this crazy surge in demand and prices was the COVID-19 which saw housing prices skyrocket in Maryland as the supply dipped to hit record lows. COVID-19 meant a severe shortage of workers which stalled construction and not just that, we saw an increase in material costs. Factors which contributed to this rise in housing prices. Starting March 2020, just around the time when the first case of COVID-19 was reported in the country, the market was loomed by uncertainty, especially when the people were forced to shelter in place threatening the economy. But in a twisted turn of event, the real estate market rebounded! Naturally, when a life threatening phenomenal such as Covid-19 happens, you expect that a slow to no activity almost in every industry. But real estate industry was unstoppable which proved a point. People were dying to own homes! But this silver lining in the real estate industry would quickly turn into a darkness for the real estate buyers as prices quickly surged to the point that they could not keep up! We saw a period where properties were selling in singledigit time periods which has resulted in serious bidding wars.

Before we can begin speculating what the future holds, I thought it would be best to first remind ourselves where we are coming from.

Just recently, Bright MLS released its data that

shows that the demand for homes decreased. This should not be surprising because it is a phenomenon being experienced almost in every major metro across the country. Bright MLS used a tool they call T3 Home Demand Index which measures the demand. The index found that the number of people seeking out homes fell more than 6% in a month and 12% since last year.

IS THIS PRICE CHANGE GOING TO LAST

FOR LONG? Nobody really knows! But it does tell us one thing about the market… consumers are changing their attitudes and perception about buying. When prices rise so fast that buyers can hardly keep up, they reach an ‘intolerable’ level. A level where buyers feel the affordability pinch. At this point the prices put so many buyers out of reach and naturally, buyers must first step out of the game, wait for the prices to level down before going back to the market. This is what is happening in Maryland right now. When buyers leave the market, there is no pressure on prices which means, prices will start falling.

But for how long? We can only speculate. What I do know is that many people are getting into the groove for the holiday season, which means they MIGHT hold the buying plans for now and wait for next year.

LET’S LOOK AT OTHER METRICS THE MEDIAN SALES PRICES

February this year market the first instance where prices started rising surpassing the $310,000 mark by the end of February up from $300,000 mark.

From Feb to June, the median sales prices in Baltimore was in an upward trajectory but started to decline steadily signaling a reversal. This has been sustained ever since. In September, the median sales price for homes in Baltimore reached $340,200 which is actually up more than 6% from a year ago but slightly down month over month.

The stats doesn’t apply to all counties, some actually had higher median sales prices than the overall median. In fact, places like Howard saw a median sales price of $450,000, Carroll $405,000 and Anne Arundel $415,000. In fact, in this list, only Howard County’s median sales price decreased from September 2020.

CLOSED SALES

Bright MLS reports that sales were slightly up from September 2020 and almost 24% from two years prior. There were 4,255 total sales in September in the Baltimore metro area.

But moving forward, I think sales will drop quite significantly especially after the fact that fall and winter are perhaps the slowest months in real estate transactions compared to summer and spring. But there is a trend that will have to watch out for moving forward. There seems to be a general preference for townhomes and condos whose sales were up about 4% each from a year ago. Yet, the single family, detached homes were down by 1.1%.

While that may be the case, it is also important to also note that single family homes listings were down 10% from 2020 and this ‘preference’ for condos is an indicative of lack of availability.

AVERAGE DAYS ON THE MARKET

On average, homes spent eight days on the market in September which is down one day from a year ago. 7 days for Howard, Harford and Baltimore counties and 6 days for Carroll County. While the market might be slowing, Baltimore market is still considered much more active than it was prepandemic. My take? We’ve been in a crazy market for far too long that we’ve actually forgotten what a normal market truly feels like.

While the supply for new inventory has been significantly down, it is good to point out that there has been some recovery, but the situation remains bleak. Supposing that homes continue to sell this fast, there is a great likely hood that the available inventory won’t last for more than 30 days.

Just to illustrate, new listings were down slightly more than 3% from a year ago and the number dipped about 8% from August to September. However, this could be the seasonality of real estate but we should still take the market seriously and address supply issues because they threaten affordable options.

This is the right time to buy a home and if you are wondering how to go about it, reach out to Emerick A. Peace, an Agent in Maryland. In addition, if you are more interested in find out what mortgage is right for you, we have tons of information about mortgages, in fact, for the last three edition of this magazine, and we’ve addressed this issue, looking into which mortgage is right for you, or alternatively, speak directly to Eric L. Frazier, a mortgage professional with over 30 years’ experience through 800-261-1634 ext. 703.

ABOUT EMERICK A. PEACE

Emerick Peace is the Operating Partner and owner of Keller Williams Preferred Properties (KWPP). KWPP is a multibillion dollar residential, luxury and commercial real estate sales brokerage with more than 570 associates located in Upper Marlboro, Maryland (Prince George’s County). Keller Williams Preferred Properties is the undisputed #1 real estate brokerage (market share, transaction and sales volume) in Prince George’s County Maryland and one of the largest single office brokerage on the eastern coast. Additionally, KWPP is ranked #443 of 84,000 residential brokerages in the United States, according to the 2018 Swanapoel Real Trends Report and #35 in Keller Williams worldwide. Its operational footprint runs throughout the Baltimore and Washington DC Metropolitan Area, operating primarily in Washington DC, Prince George’s Maryland. To find out more about Emerick, go to https://www. thepowerisnow.com/emerick-a-peace/ .

Sources

https://www.redfin.com/state/Maryland/housing-market http://www.mdrealtor.org/Resources/Publications/MonthlyHousing-Statistics https://www.us.jll.com/en/trends-and-insights/research/officemarket-statistics-trends/maryland-suburbs https://www.neighborhoodscout.com/md https://www.baltimoresun.com/business/bs-prem-bzbaltimore-housing-market-signs-of-slowing-20211012z727eqpxjbestorvhpn63geana-story.html