The Mid-Atlantic market saw an increase in activity at the start of the year as consumers began adjusting to the ‘new normal’ of higher interest rates.
The rates of both pending sales and showings in the region have increased since December 2022’s record low activity levels, foreshadowing a hot spring market for the region.
“Buyers who had been on the sidelines are showing eagerness to return to the market as rates dropped to their lowest levels since September, while sellers are starting to return in some markets, pushing new listings up month over month across the region,” said Dr. Lisa Sturtevant, Chief Economist for multiple listings service Bright MLS.
“This is a sign that both buyers and sellers are adjusting to the ‘new normal’ of 6 percent mortgage rates, longer transaction times and more negotiations between buyers and sellers. Overall, the Mid-Atlantic housing market is poised for a rebound as we head into the spring market.”
Market activity varies significantly by region across the Mid-Atlantic. However, smaller markets like the Maryland-West Virginia Panhandle are seeing the highest inventory increases.
Philadelphia saw its median home price jump to $314,000 – up 4.7 percent year-over-year, but still 10 percent lower than their peak during the summer. Price corrections in the region have bolstered sales and showing activity on a month-over-month basis, indicating that buyers are returning to the market.
New listings increased by nearly 50 percent at the start of 2023, but still remain lower than the 20-year average, posing inventory challenges for buyers.
Buyers in Baltimore are also facing inventory challenges – with only 1.11 months of supply across the metro area.
With so little inventory and a strong demand for houses, the median price of a home in Baltimore rose 3.8 percent in January to $329,950.
Prospective buyers in Washington D.C. had much better luck finding their dream home but took their time closing the deal. The average time it took for a home to go under contract rose to 30 days – right in line with pre-pandemic levels, and 17 days longer than a year ago.
Driven by the slower market activity, active listings in the D.C. metro were up 42.4 percent year-over-year by the end of January.