A Housing Market Correction May Be Underway in Greater Baltimore
Inventory in the region increased for the second straight month in June and while the median sales price remains higher than a year ago, the rate of price growth is slowing, according to new figures released by Bright MLS.
The changes to the housing market in Greater Baltimore come after nearly two years of high demand and low inventory that drove prices to record highs amid the pandemic. The Baltimore area isn't the only housing market beginning to feel the effects of inflation and higher interest rates — many other areas in the Northeast and Midwest are starting to see a cool off too.
“The Baltimore area housing market is experiencing a pull-back from the frenzied pace of the last two years as higher prices and rising mortgage rates have taken some prospective buyers out of the market,” said Bright MLS Chief Economist Lisa Sturtevant in a statement. “While inventory is expanding in the region, supply is very tight. In some suburban markets there is still less than one month of supply, so there is a long way to go to reach balanced market conditions.”
Here are a few numbers from the monthly housing report that show the shifting market conditions in the Baltimore area. It uses data provided by MarketStats by ShowingTime, and is based on listing activity from Bright MLS.
Prices aren't rising as fast. The median sales price in June was $375,000, which is up 5.6% year-over-year. While prices are still increasing, the rate at which they are year-over-year is the lowest it has been since November 2021, which saw a 2.5% increase over the year before.
Inventory is up. Active listings are up 8.2% from June 2021. While the number of single-family detached homes and townhomes on the market increased, condo listings declined. New pending sales, which have been down for 13 consecutive months, hit their lowest June level since 2014. Closed sales also declined 22% year-over-year in June. Supply remains tight though, with new listings down 13.6% from a year ago.
Demand is down. The T3 Home Demand Index, a measure Bright MLS uses to assess buyer demand, was at 116 in June, showing moderate demand. In June 2021, the index was at 146. Overall, demand remains strongest for higher-priced single-family detached homes and condos.
Buyers are looking for bargains. Looking broadly at the mid-Atlantic, Bright MLS found that home prices are increasing faster in local markets outside of major metro areas, which indicates buyers are looking for value in communities with lower prices.
Bright MLS expects sales to be "relatively slow" over the summer and while prices are expected to continue rising, the rate will be slower than before.
The city continues to be the cheapest market in the region with a median price of $240,000. But that price grew 7.9% year-over-year, which was faster than the region as a whole and was only outpaced by Harford and Howard counties. Inventory remains better than any other jurisdiction though, with median days on the market up one from a year ago to nine and 1.75 months of supply, both the highest rates in the region.
The county saw its median price grow 7.3% to $332,500. Median days on the market increased by one to six days while the county has 0.88 months of supply.
Read the full story from the Baltimore Business Journal here.