Maryland Housing Market Sees Price Surge Amid Inventory Crunch

In December, the Baltimore, Maryland housing market experienced an uptick in buyer activity thanks to falling mortgage rates. However, these prospective homeowners faced a familiar challenge: a severe shortage of available homes. A recent survey by a regional multiple listing service highlights these market conditions.

Limited Selection Drives Prices Up

According to the report, new pending home sales showed a marginal increase of 0.5% compared to the previous year, marking a slight upturn from the notably low activity in December 2022. Despite this modest rise in transactions, home prices soared with an 8.1% jump from the year before, affecting all types of housing.

Homeowners seemed reluctant to sell, contributing to the historically low inventory. With just over 27,000 active listings by year's end, this marked a 2.9% decrease from the previous year, amounting to only about 1.5 months of housing supply—an indication of a highly competitive market. Experts commonly consider a four to five-month supply as a sign of a balanced market.

Potential Unrest in Early 2024

The report anticipates that a continued dip in mortgage rates could trigger substantial market demand in early 2024, although this hinges on an increase in available properties for sale. Without more listings, buyers can expect fierce competition and escalating prices next year.

In Baltimore specifically, pending sales in December were slightly down compared to the prior year and had fallen 16.1% since November, reaching the lowest point since 2012. The median sale price, however, climbed 4.4%, with single-family detached homes witnessing the most significant price jump at 7.4%.

Washington Metro Area Faces Similar Trends

Parallel to Baltimore, December saw a seasonal drop in sales within the Washington metro area but registered a stark rise in property prices, with an overall 8.1% increase. The local market dynamics reflected challenges similar to Baltimore's, with fresh listings dwindling to a two-decade low, hinting at a persistent shortage going forward.

Housing, Inventory, Prices