Ryan Haley, broker and owner of Atlantic Shores Sotheby’s International Realty, shares his insights in his September 1st, 2022 market report for the local real estate market in Maryland and Delaware as well as a snapshot into what is going on at the national level.
As many of us know, in the last two years, the real estate market has been very robust. There have been lots of activity and we are now starting to see a little bit of a shift in the market both nationally and locally.
How Is the Real Estate Market in the US?
Let’s start with the big picture and look at what’s going on nationally.
Some of the things that we’re seeing are an increase in interest rates, a slight increase in inventory as well as an increase in terms of days on market. Also, for the first time in quite some time, we’re seeing buyers who are able to negotiate a little bit.
Take note though that we are still well within a seller’s market. When we say we are in a seller’s market, it typically means anything with less than six months’ supply.
Currently, we are at a three-month supply of inventory. If we go all the way back to 1999 inventory levels and track it, we can say that right now, we are at the second-lowest as far as months inventory per year dating all the way back to 1999. The lowest is what we saw in 2021, with 2.3 months of supply.
At present, we’re at three months’ supply, well below that six months window of inventory. Thus, we say that we are still in a seller’s market, but there is some negotiating room and there are some opportunities.
So what’s really going on?
Right now, we are seeing a deceleration in real estate prices. This is not depreciation. What it means is that we are seeing the rate at which home values are increasing decelerate or slow down. As you may know, over the last two years, we’ve seen price increases that were 20-30%.
Now, that has come down to a much slower pace and many of the experts are forecasting that for 2022, we are going to see a total price appreciation of 10.2 percent when we average everything in.
The other thing we’re seeing is that with interest rates increasing, we are seeing fewer people able to afford homes. Thus, the number of sales is actually decreasing. The projection going back to June 2022 is for 5.1 million homes to sell here in 2022. When we compare that to 2021—which was almost an anomaly year and the busiest year we ever had—6.1 million homes were sold. So, that’s about a million fewer homes sold this year.
When we compare the number back to the last five years, that kind of falls in line with what we saw in 2018. If we take 2020 and 2021 out of the picture, we are now getting back to the levels that we saw in the pre-pandemic years which were 2018 and 2019.
How Are the Maryland and Delaware Beach Real Estate Markets?
As far as the number of real estate transactions that are taking place now, what does that mean for us?
Locally, in Worcester County and in the beach markets, although the number of sales has been decreasing nationally when we take a snapshot of just the last seven days, we had 43 new properties come on the market. Those are 43 new properties that are either coming soon or just listed in the last seven days.
However, we also saw 56 properties actually go under contract. That shows us that for the last week here at the beach, we have seen more homes selling than are coming on the market. Thus, when that happens and you have a supply and demand imbalance, meaning that we will still continue to see prices increase.
In summary, inventory remains low, while prices have decelerated but are still increasing, and the days on market and active inventory are a tad higher than what we saw last year. That is a snapshot of what we are seeing here, not just locally but on the national level for the week of September 1st, 2022.
Hopefully, this information is helpful and if you have other questions about the real estate market, especially in Ocean City and the whole of Maryland and Delaware, give us a call, and we’ll be happy to answer them.