Baltimore-area housing activity slowed again in December, continuing a monthslong decline in the regional real estate market that may indicate a return to pre-pandemic seasonality, housing experts say.
Before the public health crisis, buying and selling typically wound down during the winter months and picked up momentum in the spring and summer. The coronavirus pandemic turned that familiar pattern on its head, delaying 2020′s spring season and pushing it into fall and winter.
Meanwhile, prices soared as more people entered the market, fueled by federal stimulus money, record-low interest rates and a surge of workers staying home and hunting for upgraded space. Supply, already low before the health crisis, became even more limited as manufacturing, building and permitting all faced delays.
In December, prices remained high compared with a year earlier, though they did dip slightly from November, according to data provided by MarketStats by ShowingTime based on listing activity from Bright MLS, the region’s multiple listing service. The number of closed sales fell, too, by about 5% compared with December 2020 and by about 2% from the month before.
That’s because last December broke records, said Lisa Sturtevant, consulting economist for Bright MLS. Some numbers may be decreasing, such as number of sales or level of activity, but she said that doesn’t make the market much easier to navigate.
“The trend is clear that compared to the frenzied pace before, the market is certainly cooler. But I would not want to be a buyer right now,” Sturtevant said. “Prices are still up; even as sales have slowed a bit, we’re seeing really fast price growth. We’re seeing growth all over the place so even the places more affordable are out of reach for a lot of buyers.”
Here are additional insights extracted from December’s Bright MLS housing market update:
Median sales prices
Baltimore-area homes sold at a median sales price of $328,000 in December, down from $330,000 in November but up by about 7% from a year earlier. Median means half the homes sold for more than $328,000 and half sold for less.
Given ongoing inventory challenges, the median home sales price rose in all the Baltimore-area jurisdictions, with the growth most pronounced in Carroll (15.8%) and Baltimore (10%) counties, where homes sold at medians of $405,000 and $297,000, respectively.
Sturtevant said consumers also may be motivated to move quickly before interest rates get any higher. They dipped under 3% during the pandemic but have rebounded since, she said.
Condo prices, which tend to be more affordable than single-family homes, rose dramatically, with the median sales price up 15.7% across the region. Median prices for detached homes, meanwhile, grew modestly by about 3.8%.
Two other jurisdictions had higher median homes prices than $328,000: Anne Arundel ($415,000) and Howard ($465,000) counties. The median prices in Harford County ($320,000) and Baltimore City ($201,500) also rose, by 8.5% and 2.3%, respectively.
Given these price points, first-time buyers or entry-level consumers may have trouble finding affordable housing options this year, said Sturtevant, especially as interest rates creep back up.
“We’ve been in a situation for about 18 months where prices have been rising so fast but low mortgage rates have offset some of those increases,” she said. “It’s going to be a very challenging 2022 for first-time homebuyers.”
There were 3,846 total sales in December. The drop in activity may have afforded some relief for area real estate professionals who have worked amid high-paced conditions for more than a year.
Sales dropped across the map, with the exception of Baltimore City, where closings improved by about 1% to 943 compared with the same time a year ago.
It was the 10th month in a row with 900 or more purchases in Baltimore, and 2021 home sales beat 2020′s by about 1,900, said Annie Milli, executive director of Live Baltimore, the city’s marketing arm.
It was the city’s best December for home sales in more than a decade, according to the organization, with homes selling faster and at more competitive prices. They attributed December’s strong showing to the “lower-middle market,” though every sub-market saw fast transactions and median price rises.
“Not even 2005, the previous height of the housing market, saw this much investment,” Milli said in a statement. “Homebuyers are clearly finding value in Baltimore City, making bigger offers and grabbing properties in fewer days. Baltimore City remains the most affordable county in the metro region while offering something for everyone looking to purchase.”
Sturtevant said the city’s popularity among buyers reflects national trends of people relocating to more urban areas as restaurants, offices and other gathering spots reopen.
“People will be more eager to gather again, and Baltimore is a great city,” she said. “People who desire those amenities are still out there.”
Baltimore County had the most sales, with 1,052, followed by Baltimore and then Anne Arundel County, which saw 902. Overall, the number of closed sales fell by 4.9% across the region.
Attached homes faced the steepest declines in sales, according to MLS, though single-family home closings also decreased.
Still, sales in all six of the metro area counties made gains over December 2020, suggesting that while the pace of the market has slowed, it still isn’t considered “slow.”
Median days on the market
The median number of days that homes spent on the market stayed in the double digits for another month.
Properties took a median of 11 days to sell in December, up from 10 days the month before and nine days a year earlier. Though higher than it was several months ago, it’s much lower relative to December 2019, when homes sold in a median of 33 days.
All municipalities except one had medians under 11, including Anne Arundel (10), Baltimore (nine), Carroll (10), Harford (eight) and Howard (seven) counties. City homes sold in a median of 19 days, down from 36 days two years ago, before the pandemic.
Supply is down from a year ago, a sign that high prices and bidding wars might return come springtime.
If homes continued to sell at this pace, it would take a little more than three weeks for inventory to run out, according to Bright MLS. Sturtevant said supply should improve some by the springtime as the omicron surge eases and people relist their properties.
New listings were down more than 7% from a year ago and active listings fell more than 17% since December 2020. Listings were down by more than 22% from November, likely reflecting consumers recalculating their options as the renewed surge in COVID cases caused by the highly contagious omicron variant renewed uncertainty in the market.
Bright MLS tracks activity using a tool called the T3 Home Demand Index, which scored December demand at 73 (“slow”), down from 98 (“steady”) a month earlier. The ranking stood at 88 in December 2020.