Real Estate Market Update – October 19, 2022, Worcester & Sussex Counties

Ryan Haley is back with his market report for Worcester and Sussex counties for October 19, 2022. 

Market Update for Worcester County, Maryland

What we saw here was pretty much an even-Steven market for the last seven days. There were 54 new properties coming on the market, while at the same time, we had 56 go under contract. 

If you recall last week’s market report, we actually had more properties on the market than went under contract. The three weeks previous to that, we had more under contract than we had come on the market. Seems like we’re going back to that phase where we are still selling at a pretty good clip here and out-selling what we currently have coming on the market.

We also saw a reduction in the number of properties that decreased their listing price. We were down to 20 properties that were reduced in price here in the last seven days.

Market Update for Sussex County, Delaware

Sussex County, as we all know, is a little bit larger county, taking up a third of the state in Delaware. In Sussex, there were 180 new properties that came on the market in the last seven days, while just 118 have gone under contract. 

So, in Sussex County, we are definitely seeing some more properties hitting the market and a little bit less going under contract. At the same time, 152 properties were reduced in price in the last seven days in Sussex County. 

A Tale of Two Counties

It’s a tale of two markets, with the two counties showing a little bit different results. Worcester County is remaining level, whereas Sussex County is getting some more opportunities. 

So, if you’re a buyer, there are more opportunities out there for you to take a look at.

Market Update for the Country

Now, let’s shift to the national market. 

On the national level, we continued to hear more about rising interest rates. That has led to the question on what’s going to happen in the near term and the long term when it comes to pricing. 

We’ve seen a little bit of a shift or a little bit of a balancing. Right now, when we look at home price forecasts for 2023 by the reporting entities, about half of them are saying that we will see a slight increase in prices in 2023. The other half is saying that we may see a slight decrease.

So, when you look at the net effect, based on the five averages between the Mortgage Bankers Association, HPES, Nar, Fannie Mae, and Zelman, we’re looking at a 0.2 percent increase that is estimated for 2023. That’s pretty much flat and level with what we’re expected to see in 2023. 

Experts are saying that we’re not going to see prices really increase and we’re not going to see that big drop that some people are thinking we may see.

Global CEOs see a mild and short recession, yet optimistic about the global economy over the three-year horizon. More than eight out of 10 anticipate a recession over the next 12 months, with more than half expecting it to be a mild and short recession. That was reported by KPMG CEO, and their outlook here on October 4th of 2022.

Market Projections Beyond 2023

Now, what’s ahead? 

We’ve just discussed the market for the near term and for 2023, but what goes beyond that?

An interesting finding has come to the fore. Home prices are expected to fall and then recover, according to Wells Fargo. 

Wells Fargo predicts that in 2023 home prices will actually decrease by 5.5%. This sounds like a big number, but when you consider that nationally, we’ve seen prices up as much as 40 percent over the last two years, so 5.5% is not a huge number. 

But what happens in 2024? That’s where Wells Fargo is projecting a rebound, a 3.1-percent increase in home prices in 2024. 

A lot of the experts are expecting a level playing field for next year. We’re not seeing a huge upswing in prices and not seeing a huge downswing either. Some of the bankers are chiming in, saying that they think that we’ll see a decrease in next year in 2023, and then another increase in 2024. 

It seems like that’s pointing to a short possible recession in the housing market.

An important thing to look at when it comes to recession—if we do get into a sure recession—is what happened over the course of the last six recessions.  In all of them, we’ve seen mortgage interest rates decrease. 

In 1980, we saw a decrease of 4.25%. In the recession in 1981, we saw a decrease of 5%, and then in 1991, another decrease of 2.25% in mortgage interest rates. In 2001, which was dot-com recession, there was less than 1% decrease in mortgage interest rates. In 2008, we saw a decrease of 1.125%, and then, in the very short-lived 2020 recession, we saw a decrease of 1% in interest rates.