Forecast of Trends & Home Values in Maryland for 2023

It appears that the cost of houses in Maryland is only increasing.

Joe Shaver, a realtor from Re/Max Realty Center in Olney, Maryland, states that despite the declining market this year, house prices have been growing at an average rate of 2.5% each quarter. He adds that prior to the pandemic, the increase was almost at 5%.

In Maryland, the supply of housing has dropped significantly in 2020; however, prices have risen and properties are usually sold shortly after they are advertised. The presence of a large number of government employees and members of the armed forces nearby ensures that the housing market in the state will remain attractive to buyers.

Incentives such as free refinancing if interest rates decline are being presented by lenders. Even though many homes are still being offered over their listed cost, it may not be necessary to persuade potential homebuyers to make a purchase.

Maryland’s Present Real Estate Market

Comprising of 23 counties and Baltimore City, Maryland has Washington D.C. and four other states in the mid-Atlantic as its boundaries. According to Shaver, the nation’s capital has an immense effect on the housing sector in the region.

The area is host to significant military facilities, and with national elections every two years, there is consistent personnel turnover in many government positions. As fresh personnel come in, they usually seek to settle down in Maryland.

Through 2030, the Maryland Housing Needs Assessment & 10-Year Strategic Plan from the National Center for Smart Growth anticipates an increase of 178,000 new households in the state, largely concentrated in the Baltimore area and suburbs of the nation’s capital. Moreover, the plan emphasizes the need for affordable dwellings as well as housing specifically tailored to low-income households.

Maryland’s Property Market and Statistics

Statistics regarding the housing market in Maryland and trends that have been observed can be examined here.

In Maryland, inventory is limited, yet housing sales are still active and prices are increasing. It is unsurprising that the markets with the most growth are those in or around the Baltimore and Washington D.C. metro regions.

Fewer Properties on the Market, Speedier Transactions

Maryland Realtors, a nonprofit organization, declared that listings in the state have drastically decreased in 2023, with only 6,491 new listings this year compared to the 9,900 from the same time last year.

In 2022, the state’s housing inventory was estimated at 1.5 months, but by July 2023, the amount had dropped to 1.4 months.

This year, it is taking a median of seven days for a home to go from being listed to being pending, which is one day faster than the median of eight days in 2022.

According to a report from real estate website Zillow, homes are being sold at a much quicker rate. An analysis of the data for July 2023 revealed that the median time before the status of a home moved to pending was six days.

A Number of Houses are Selling at Prices Higher than What was Originally Requested

One of the primary factors causing an increase in property values is the reduced availability of housing. The Maryland Realtors report that, in the current year, the typical sale price in Maryland has risen to $486,385, representing a 3.2% growth.

The Greater Baltimore Board of Realtors reported that the median price in Baltimore in July 2023 was substantially higher than the five-year city average. The median price this summer was posted as $290,000 while the five-year average was determined to be $266,980.

Throughout the state, many residences are going for more than their listed values, too. Zillow reports that in June 2023, over half of the transactions were higher than the asking price.

According to the Maryland Realtors, the most significant increase in average prices year-over-year was seen in the following counties:

• In Dorchester County, 27.6%
• In Worcester County, 8.7%
• And in Allegany County, 8.6%

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Kent County stands alone in the decrease of prices, as the average sales prices over the last year have plunged 27.1%.

The study conducted by the group revealed that Montgomery County properties have the most expensive average sale price of $750,482 in the whole state. On the contrary, Allegany County is the best option for those seeking a bargain with an average price of $163,256.

Analyzing its data, real estate brokerage firm Redfin pinpointed the cities in Maryland with the most noteworthy upticks in prices:

• In Elkridge. 28.8% of the population
• Montgomery Village had. 27.1%
• The city of Cambridge. 23.6%
• Ilchester. 22.4%
• Annapolis had. 21.8%

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Buyers are likely to be willing to offer an amount above the list price in Perry Hall, Bel Air and Bel Air North, according to Redfin.

See Also: Projections for Mortgage Rates

Predictions for the Real Estate Market in Maryland

It is predicted that the housing market in the state of Maryland is forecasted to stay competitive throughout 2021. With low interest rates and a steady supply of homes, the market is likely to remain a buyer’s market for the foreseeable future. Analysts predict that prices will continue to rise despite the increased demand and that the market will remain in balance.

It is unlikely that the housing market in Maryland will be seeing any alterations in the near future. While the flattening of interest rates might bring more potential purchasers into the market, the demand for additional homes is far greater than the demand for buyers.

Tom Coale, a lawyer specializing in land use and zoning, has observed that, since 2008, Maryland has only built around 15,000 housing units annually, while its population has increased by 40,000 people yearly. This was reported by The Baltimore Sun.

Despite the possibility of more fresh construction homes, many occupants who already own property have low-interest mortgages or have fully satisfied their home loans. Consequently, from a financial standpoint, there is not much motivation for these households to relocate.

Bright MLS, a Maryland-based real estate data company, reported in their July 2023 Mid-Atlantic Market Report that the same conditions are likely to appear in the rest of the area. In a press release, they noted the fall market in the Mid-Atlantic will be marked by low inventory, stable to higher home prices, and escalating affordability issues.

Contemplating Purchasing or Selling a Home in Maryland?

In Maryland, those wishing to sell their residences may be able to acquire a high price and close the deal promptly. On the other hand, those who wish to stay in the state, should anticipate competing with many other purchasers for a new abode.

The urge to wait for the Maryland housing market to chill and mortgage interest rates to decrease could be a bad financial decision, in the opinion of Shaver.

He states that, although one may be waiting for the rates to drop, the prices of homes keep rising, potentially negating any benefit from decreased interest payments.

In Maryland, mortgage lenders have implemented multiple initiatives to reduce the effect of high-interest rates on the housing market. For example, buyers may be able to take advantage of buydown programs that offer reduced payments for the initial two years of the mortgage. Additionally, some lenders are offering free refinancing of mortgages if rates lower in a given timeframe.

The state of Maryland is attempting to make homeownership more attainable with the Maryland Mortgage Program. The program offers fixed-rate mortgages, down payment support, and matching contributions from partners. Borrowers must meet criteria to be eligible, though these requirements are more flexible for those looking to purchase a home in a target area, for example Baltimore.

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