A midterm report
When you’re a realtor, everyone asks that question when we meet. So, here’s a mid-year report on our local markets, using data from our Multiple List for May (the last month fully reported as of the paper’s deadline).
Properties in Baltimore City and County have been selling at a breakneck pace. The average number of properties sold over the last five years in the month of May is 642 for the city and 804 for the county. This May the number of properties sold is 803 for the city, and the county clocks in at 969 (125% and 121% of the average, respectively). Similar trends are underway in the surrounding counties in central Maryland.
Inventories of homes for sale have not increased, however. We’re currently well within the five-year averages when it comes to number of houses on the market. The result of increasing sales and steady inventory means that sellers will generally have shorter listing times, and the “months of supply”, i.e., the number of months it would take to sell every house currently on the market, have dropped significantly over the five-year averages: in the city, from 6.4 months down to 5.0. In the county, the five-year average is 4.7 months of supply, and currently they are down to 3.5.
How do these numbers translate to everyday experience? We are now in a seller’s market. Buyers don’t have the leverage they had a couple of years ago to bargain on price and contract terms. This year we have routinely received multiple offers on listings that are priced well, in good condition, and in sought-after locations. Unlike the “bad old days” of the last boom, however, lenders and appraisers today are not allowing the type of price inflation we saw a decade ago. Most predictions have been for a 5-6% price increase in 2016, and I don’t think we’ve seen anything so far this year that would alter that prediction.
I’m expecting that the market numbers for June will drop significantly from May because we’ve seen a steep decline in showings around mid-month as summer weather arrived and schools let out for the season. That seasonal drop is not unusual and is not a cause for alarm. Great Britain’s vote to exit from the European Union, or “Brexit,” has not had any effect on our real estate markets so far. Looking forward, the only predicted effect of Brexit is that our mortgage interest rates will continue to be at historically low levels – previous predictions were that the rates would rise through the end of the year.
Rents are not expected to drop, either. So, if you are starting to get hives whenever you write that monthly check to your landlord, it will continue to be a great time to buy. In many cases, mortgage payments will actually be smaller than current rent payments. Start looking this summer, when traffic will be slower and your interest will be more appreciated! Even if you don’t find the perfect home, you’ll be market educated and ready to snap up that perfect house that goes up for sale in the fall.
- Wayne Curtis has been a licensed real estate agent for 23 years, serving the Baltimore region, currently with REMAX Advantage Realty. Contact him with your real estate questions, email@example.com.