Bright MLS July Housing Report: Mid-Atlantic Housing Market Resilient
Median Home Price in the Mid-Atlantic Region Up 3.9% in July, Strongest Price Growth Since January, Different Trend than Other National Markets
- Demand remains strong as low inventory has forced buyers to continue their home search well into the summer
- Sales activity is still tracking below 2022, but the gap has narrowed as mortgage rates have moved closer to last year’s levels
- The main constraint is still supply, as new listing activity is at a more than two decade low across the region
The Mid-Atlantic housing market stayed firmly on the summer pace set in June, as buyers still compete for historically-low levels of inventory even in the midst of an elevated mortgage rate environment, according to the Bright MLS Mid-Atlantic July Housing Report released today. The median home price in the region was up 3.9% in July, the strongest price growth since January.
“It’s been surprising to me that higher rates and prices have not pushed more people out of the market, particularly first-time buyers,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “Buyers are definitely having to get creative to navigate the competitive market, with assumable mortgages and seller financing now part of the conversation for some.”
The median sales price in the Mid-Atlantic was $400,000 in July, 3.9% higher than a year ago, with prices up in each of the Washington, D.C., Philadelphia, and Baltimore metro areas. Median days on the market, an indicator of how quickly homes are moving, stayed flat at seven in Baltimore, nine in Philadelphia, and was even down a day in the Washington, D.C. metro area to seven.
Summer typically sees the market cool slightly, as vacation and travel season kicks into high gear. No relief was found in the market for buyers, however, as new listings were down over 29% in the region. Active listings were down 19.1%, further indicating the pace of the market is still very fast, with buyers needing to move quickly once they find a home on the market that suits their needs.
New pending sales declined 13% and closed sales were down 20% year-over-year across the region in July. The lack of inventory is also impacting showings, which were down nearly 12% from a year ago. Despite the year-over-year declines, the gap in market activity between this year and last year has narrowed.
Looking ahead, Bright expects the fall market in the Mid-Atlantic will be characterized by low inventory, stable or rising home prices, and growing affordability challenges. Mortgage rates will begin to come down but will likely remain around 6.5%. With mortgage rates remaining elevated, homeowners have little incentive to sell if it means they will have to give up their low rate. However, expect listing activity to increase slightly over the next couple of months, as there will be more “movers of necessity,” as well as more transactions with non-standard financing, including assumable mortgages, which are available in some cases for FHA loans or mortgages backed by the VA or USDA, as well as seller financing.
Key Market Takeaways
Philadelphia Metro Area: The Home Price has Risen for the 6th Consecutive Year, but Buyers are Still Willing to Buy
In July, the median price in the Philadelphia metro area was $369,000, just shy of the $370,000 record in June. Prices rose in all local markets in the region, including in Philadelphia County, where home prices had dipped earlier this year.
Housing affordability is a growing challenge in the Philadelphia region. Despite the affordability challenges, home buyers remain active in the Philadelphia area market. While showing activity was down 13.8% compared to last July, the 2022 to 2023 gap in buyer traffic has been narrowing.
Baltimore Metro Area: The Lack of Supply is Causing Frustrations for Buyers
In July, a total of 2,852 new listings came onto the market across the Baltimore metro area, which is down 38.7% compared to last July and is at a more than 20-year low. While elevated mortgage rates and growing affordability challenges have not deterred buyers, the persistently low inventory has subdued sales activity across the region.
Buyers need to act quickly, particularly in the region’s suburban markets where there is only about a month’s supply of inventory. The median days on market in the Baltimore region was 7 in July, meaning half of all homes sold in a week or less.
Washington, D.C. Metro Area: Home Prices are Making the Strongest Climb in Over a Year, but Demand is Still Strong
The Washington area’s hot summer weather typically slows housing market activity, but this year home shoppers are still active, competing over ever-shrinking inventory and driving prices higher. In July, the median sales price in the Washington, D.C. metro area was $590,000, a 4.8% rise from a year ago and the biggest year-over-year increase since June 2022. Prices are rising faster in the region’s suburban markets, where housing is slightly more affordable.
Overall, across the region, there were just 5,731 total active listings at the end of July, down 29.3% from a year ago and less than half of the inventory that was on the market prior to the pandemic. Buyers this summer have been acting quickly. The median days on market in the Washington, D.C. metro area was just 7 in July, meaning that half of all homes sold in a week or less.
Central Pennsylvania: Prices are Growing and Inventory Declines for the Second Consecutive Month
The price trajectory in Central Pennsylvania continued upward in July. While median price growth moderated in February through April, the past few months have seen bigger gains in price. July 2023’s median price of $275,000 was 7.8% higher than last year and only $2,000 less than the record high median price hit the prior month.
While demand is slower than last year, the lack of new listings has started eating into the inventory gains from earlier this year. Active listings decreased 7.8% year-over-year in July. This follows the smaller 1.4% decline that happened in June. Price pressure will likely remain as the inventory situation in Central Pennsylvania is bleak.
Maryland-West Virginia Panhandle: Prices are at Record High While Demand Continues to Outweigh Inventory
The median sale price in the Maryland/West Virginia Panhandle reached $295,000 in July 2023. This is the highest median price recorded for the region. Home prices are now more than 50% higher than they were in 2019. Still, the Panhandle is significantly more affordable than other major metros in the Mid-Atlantic.
As buyers consider affordability, the Maryland/West Virginia Panhandle has been a draw. Demand in the area continues to outweigh supply. New listings have been significantly below 2022 levels, and while pending and closed sales have been lower, their gap is narrowing. As inventory continues to fall, price pressure will continue as buyers in the Maryland/West Virginia Panhandle compete for limited listings.
Maryland Eastern Shore: The Median Price Falls after a High in May, but Inventory is Unlikely to Grow Anytime Soon
Maryland Eastern Shore has had some ebbs and flows in its median sale price. In July, the median price decreased 2.2% compared to the previous year, now at $342,350, but this comes just two months after hitting the highest median sale price on record.
Inventory struggles and elevated mortgage rates have limited transaction activity. Yet as mortgage rates more closely resemble 2022 now than they did at the beginning of the year, the difference in pending sales has declined. In July 2023, new pending sales lagged July 2022 by 12.3%. Moves out of necessity (e.g., marriage, divorce, children, job change) will continue, and the gap may close further in the fall.
Del/Mar Coastal: Inventory is Higher than Levels in 2022, Unlike the Rest of the Mid-Atlantic, but Pricing Pressure Persists
In some ways, Del/Mar Coastal matches the overall Mid-Atlantic housing market trends – prices continued to climb year-over-year, new listings have been added much slower than their 2022 pace, and the difference between pending sales in the two years narrowed.
Yet Del/Mar Coastal has more inventory than was available to buyers last year. The Mid-Atlantic saw a second, and larger, decline in inventory in July. The gap between active listings in Del/Mar Coastal is shrinking but remained in positive territory, up 9.0%.
The relative “extra” inventory in Del/Mar has not impacted price trends. While May’s median price declined 0.5% year-over-year, June’s was up 7.9%, and the July median price rose 5.1% compared to a year ago.
North Central Virginia: The Median Price is Up While Listings Continue to Plummet
While some markets around the country have seen dropping prices, the same is not true in much of the Mid-Atlantic, including North Central Virginia. The median sale price in North Central Virginia was 4.4% higher than the previous year, off slightly from its recent high of $475,000.
In July 2023, active listings decreased 22.8% from last year. The difference has grown over the past three months, down 4.5% in May and then 15.8% in June. Active listings may not look so bleak compared to the only 1,019 that were on the market in February 2022, but inventory levels are less than 40% of what they were in 2019.
Southern Maryland: Prices Have Come Down Slightly, but Inventory Remains a Big Constraint
The median sale price in Southern Maryland declined 1.2% year-over-year in July; however, the dip in prices was driven by a 4.3% decline in single-family home prices. The price trend in Southern Maryland has been up and down in 2023, likely a result of the mix of homes being sold and the push and pull of supply and demand.
Low inventory will keep the Southern Maryland market competitive. Active listings are down for the 2nd month in a row, down 17.0% in July. New listings have consistently tracked below their 2022 levels and are not enough to add to supply.
The full Mid-Atlantic and new area reports are available at BrightMLS.com/MarketInsights.
SOURCE Bright MLS
