The Maryland Real Estate Market
Two factors have been making the price of real estate in Maryland rapidly appreciate.
One of the factors is mortgage interest rates, which are at historically low levels. The following shows rates as of October 2, 2020.
--- Conventional, 30 year, fixed rate: 2.875%
--- Conventional, 15 year, fixed rate: 2.375%
--- FHA or VA, 30 year, fixed rate: 2.5%
These low rates increase the affordability of buyers such that they can pay higher prices.
The second factor is inventory. The number of homes on the market over the last 3 to 4 years has consistently gone down in monthly year on year comparisons. Correspondingly, the number of buyers has not shown such a consistent decrease. Based on the theory of supply and demand, this pushes prices upward.
A comparison of August 2019 versus August 2020, which is shown below, shows the drastic difference in inventory and the major increase in price.
Actively Inventory (homes listed for sale):
August 2019: 24,952
August 2020: 10,077
% Change: -59.2%
Average Sales Price:
August 2019: $361,823
August 2020: $402,452
% Change: +11.2%
Median Sales Price:
August 2019: $310,000
August 2020: $340,000
% Change: +9.7%
The number of homes sold has been increasing and the days on market has been decreasing.
This phenomenon is occurring throughout Maryland, whereby 23 counties and Baltimore City showed similar drastic drops in inventory.
If you are thinking about selling a house, then this may be a good time to do it.