HUGHESVILLE, Md. – May 11, 2022 – As inflation soars and interest rates continue to rise from historic lows, the spring housing market in southern Maryland is starting to show some anticipated trends.
Although an overwhelming majority of homes that sold over the last month did so in under 10 days, there is more active inventory than there was last year at the same time. Even though most homes sold quickly, the average days on the market in Southern Maryland rose slightly from 2021 by two days.
This is a slight positive as the region saw its months of inventory grow to .71 months in April and hopefully on its way back to healthy market levels, which haven’t been seen since 2019.
With climbing interest rates now passing 5%, home sales and home price appreciation are expected to slow down. Due to the time of year and current economic volatility, it will be increasingly difficult to tell how effective these rate changes are until months down the road.
“It is always a good time to purchase real estate, despite recent upticks in mortgage lending rates and little inventory,” Southern Maryland Association of Realtors® 2021-22 President Gregg Kantak said. “Nonetheless, understanding how housing affects inflation means understanding what US inflation data tries to measure. The Consumer Price Index (CPI) is a “cost-of-living index”: it aims to measure the price of different goods and services that households consume. It is not meant to measure the value of families’ investment assets, such as stocks. However, this goal creates a unique challenge with owner-occupied housing: the price of a house reflects both its value as an investment asset, which CPI in principle wants to ignore, and as a good that provides a “service” (i.e., shelter) to the families that live in it, whose cost CPI wants to incorporate.”
Prices are still growing, as the region saw the median sold price rise by 8.11% when compared to last year, up to $400,000.
Market volatility and uncertainty are considered a major contributors to the reduction of people wanting to sell their homes, leading to a decrease in new listings in April of last year by 7.09%. The total number of new listings is not far off from the 5-year average.
Another sign of the market returning to more normal levels is seeing a slight drop in the average sold price to the original list price ratio.
During the same time last year, homes were selling on average for 101.8% of what they were originally listed for, but that number has now dropped to 101.3%. Although it is a small decrease, it shows a significant change in the local market.
“Rising home prices directly affect household wealth and neighborhood affordability,” Kantak explained. “They also play an important role in overall inflation. Even small increases in rent and home prices can, in principle, have noticeable effects on overall inflation.”
Housing market statistics from each county in the Southern Maryland region can be found below:
- Units Sold: 136 (-26.09%)
- Total Sales Volume: $ 65,823,743 (-12.67%)
- Average Days On The Market: 14 (-3 Days from April 2021)
- Median Sold Price: $442,450 (+17.99%)
- Units Sold: 261 (+1.56%)
- Total Sales Volume: $ 113,706,555 (+11.57%)
- Average Days On The Market: 15 (+3 Days from April 2021)
- Median Sold Price: $420,000 (+11.41%)
St. Mary’s County
- Units Sold: 164 (+2.50%)
- Total Sales Volume: $ 66,109,657 (+16.73%)
- Average Days On The Market: 23 (+5 Days from April 2021)
- Median Sold Price: $379,545 (+8.47%)
Statistics for this article were compiled with cooperation from Bright MLS, a leading housing market data source and a real estate listing service for Realtors® throughout the region.