The coronavirus pandemic has made purchasing a home more challenging for Marylanders as a limited inventory of homes for sale fuels a dizzying buying frenzy. And though mortgage interest rates remain at record lows, median home sales prices have increased to all-time highs.
The trends indicate a classic case of supply and demand, ultimately benefiting sellers who can list their homes and see the listing price matched or even bid higher in a matter of days. The red-hot market took off last June after several months of uncertainty caused by the coronavirus pandemic slowed home buying.
“What’s incredible is, buyers are unperturbed,” said Elliot Eisenberg, the consulting economist to Bright MLS. “It’s an unstoppable force at this point.”
And it’s not just homes: The building materials needed to construct them have surged in price, too. Builders, developers and others in the housing industry say rising lumber and construction costs are contributing to the growing scarcity of affordable housing for first-time buyers and others.
Here are additional insights extracted from May’s Bright MLS housing market update:
Median sales prices
The median sales price for a house in the Baltimore metro area reached $341,000, up 3% from the previous month and 15.4% from May 2020′s median price.
Median means half the region’s homes sold in May sold for more than $341,000, and half sold for less.
The medians in Baltimore and Harford counties, as well as Baltimore City, hit all-time highs of $303,400, $320,000 and $229,800, respectively.
The median sales prices for detached homes in Anne Arundel, Carroll and Howard counties reached $425,000, $375,000 and $505,000.
While those prices are higher than in previous years, Eisenberg said the Baltimore market remains more affordable than neighboring East Coast cities, such as Washington and Philadelphia.
“It doesn’t mean you’re cheap, but you’re cheaper than they are,” he said.
There were 4,318 closed sales in the Baltimore metro area last month, a record for May.
That includes a record number of townhomes: 1,735. More are selling now given their relatively lower price points compared to detached homes, as well as the scarcity of single-family homes to be found.
Townhouse sales in Baltimore City reached a decade high of 794.
Annie Milli, executive director of Live Baltimore, the city’s marketing arm, said the city’s increases in number of purchases and in median price is outpacing those in surrounding counties.
“City properties are being snatched up as fast as homes in the rest of the metro region, whereas they have historically sold less quickly,” Milli said. “Buyers want to be here right now!”
In all, sales were up more than 50% since last May, when the area remained mostly shut down due to pandemic-related restrictions. They’re also up nearly 15% since May 2019.
Median days on market
May is typically one of the busiest months for home sales in the area, but these conditions have significantly dialed up the pressure on potential buyers to make offers.
Baltimore-area homes are selling at a median of just six days. Some counties have even lower medians, including Harford, Carroll, Baltimore and Anne Arundel, all five days.
The median number of days on the market held steady from last month, but easily beat last year and the year before that by nine days.
Eisenberg said it’s not clear whether the activity will slow down come summer, though demand typically wanes in the summer and fall months compared to spring.
It would take just over three weeks for all of the houses available for sale to be snapped up if demand held steady.
“This is really a super tight market,” Eisenberg said. “Demand has returned incredibly quickly, whereas supply is still very slowly recovering.”
(Demand is high, according to Bright MLS, which uses a tool called the T3 Home Demand Index to measure interest and housing activity).
The number of new listings crept up since last month, but only by 0.4%.
New listings are up almost 30% from May 2020, but down nearly 11% from May 2019.