Bright MLS December Housing Report: 2023 Housing Market Ends Surprisingly Strong
Home prices rise faster than they have in more than a year
- The median sale price in the Bright MLS service area increased by 8.1% in December. This is the fastest pace of price growth since May 2022. Prices were up strongly across the Mid-Atlantic region.
- A lack of fresh new listings fueled the robust price appreciation. There were 11,780 new listings that came onto the market in December, which is the lowest level of monthly new listings in more than two decades.
- After hitting a 23-year high in early November, mortgage rates fell through the end of 2023. Those lower rates fueled the sizeable price growth in December.
- Mortgage rates will continue to fall in 2024, which will improve affordability for homebuyers. Declining rates could also bring more sellers into the market, resulting in a busy early 2024 market.
Falling mortgage rates brought more buyers into the market in December, but they faced the same constraint that has been plaguing buyers for the past two years—a serious lack of homes to choose from. There were 13,109 new pending sales through the Bright MLS service area in December, which was up very slightly (+0.5%) compared to the extremely low levels of market activity in December 2022.
While transactions were still relatively low in December, home prices rose strongly. The median price was up 8.1% year-over-year, with strong price appreciation for all housing types (i.e., single-family detached, townhomes, and condos) and across all regions throughout Bright’s footprint.
“It was definitely a little bit of a surprise to see prices rise so fast in December,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “Lower mortgage rates enticed more buyers, but they are still finding a dearth of inventory. Prices will continue to rise until there is more inventory.”
Existing homeowners are still largely sitting tight. There were 11,780 new listings added to the market in December, which is a more than two-decade low. At the end of 2023, there were just 27,592 active listings on the market, which is down 2.9% from a year ago. That level of inventory translates into 1.52 months of supply. A balanced market would typically have between four and five months of supply.
There is significant pent-up demand in the market which will likely be unleashed in early 2024 if mortgage rates continue to fall. However, the prospects for a busy 2024 market depends on whether there is more inventory. Right now, buyers should expect a very competitive market in 2024, with prices continuing to rise.
December Mid-Atlantic Housing Market by Region
Philadelphia:
Fast Home Price Growth to End the Year
Median sale price rose 9.4%, fastest growth since spring 2022
- In December, the median sale price was $350,000, which was up 9.4% compared to last December and is the fastest year-over-year price growth since May 2022. Price appreciation was widespread, with prices up for all housing types and in all jurisdictions with the exception of Philadelphia County.
- There were 3,754 new pending sales in the Philadelphia metro area, which was 4.0% lower than a year prior. Monthly pending sales were at their lowest level since April 2020 when the pandemic locked down the housing market in Pennsylvania.
- There were fewer sales simply because there was not enough inventory. In December, a total of 3,582 new listings came onto the market throughout the Philadelphia metro area. New listing activity is down 8.7% compared to December 2022, and fell 32.1% from November.
Baltimore:
Slow Sales Activity to End the Year
But few new listings keep prices rising in December
- There was a total of 1,998 new pending sales across the region, which was 1.0% lower than a year ago and down 16.1% from November. This is the lowest level of pending sales activity since 2012.
- The median sale price in December was $355,000 which was up 4.4% across all housing types. Prices rose fastest for single-family detached homes, up 7.4% year-over-year.
- Slower sales in December reflects the lack of inventory available. There were 1,703 new listings in December, which is down 20.2% from a year ago and is the fewest number of monthly new listings in more than two decades.
Washington, D.C.:
A Surprisingly Strong Market in December
Median sale price rose 8.1%, fastest growth since spring 2022
- While home sales activity fell seasonally in December, prices were up strongly in the Washington, D.C. metro area. The median home price was $554,950, which was up by 8.1%. Home prices were up strongly across housing types, and prices rose in all local markets except the District of Columbia.
- There were 2,678 new pending sales, which was 1.1% lower than a year prior. Monthly pending sales were at their lowest level since 2008.
- Slower sales in December reflects the fact that there are few fresh new listings coming onto the market. In December, a total of 2,217 new listings came onto the market throughout the Washington, D.C. metro area. New listings are at their lowest levels in more than two decades.
The full Mid-Atlantic and market metro area reports are available at BrightMLS.com/MarketInsights.
SOURCE Bright MLS
CONTACT: Christy Reap, Christy.reap@brightmls.com, 202-309-9362
