What homes there are for sale in the Baltimore area are selling fast, often at close to the asking price and sometimes in bidding wars.
Spurred by limited inventory, desire for more personal space and record-low mortgage rates, homebuyers pushed median sales prices in the region and new pending sales to 10-year highs in June.
The housing market, slowed dramatically by the coronavirus pandemic in April and May, has begun to rebound, a trend that economists and those affiliated with the industry predicted during the decline because the inventory of homes for sale was already short.
Nearly 4,000 homes sold in the Baltimore metropolitan area last month, which includes the city and Anne Arundel, Baltimore, Carroll, Harford and Howard counties, according to new data published Tuesday by Bright MLS.
The 3,941 homes that sold — 1.2% more than last June’s total and 37.2% more than in May — spent an average of 14 days on the market. That’s down three days from June 2019 and one day fewer than May’s average, reported Bright MLS, the regions listing service.
Such a furious sales pace is partly a reflection of a lack of homes for sale. The inventory of active listings plummeted nearly 46% to 5,440 homes in June.
“What we’re seeing now is indicative of a recovering market,” said Chris Finnegan, a Bright MLS spokesperson. “People are out there waiting on the sidelines to list their homes and get in the market, but this shows if you do, you’re going to get a nice price and have people snap them up.”
He cited June’s rise in new pending sales to 5,156, up 19.1% higher than a year earlier and 14.4% greater than May, as a barometer of the market’s health.
Demand pushed the median sales price for the region’s homes to $309,000 in June, up 3% since last year, according to the data. While this might appear high for Baltimore, it pales in comparison to the median home sale prices in Montgomery County, Washington and Northern Virginia, Finnegan said.
“Nationally, Baltimore is far from cheap, but regionally, it’s a great value compared to the district and the greater capital area,” he added.
Meanwhile, mortgage rates fell to less than 3.2% in June, sparking strong interest from potential buyers.
“We’ve never seen these rates,” said Gay Cororaton, director of housing and commercial research for the National Association of Realtors. “It just pays to pay a mortgage more than rent.”
Despite the pandemic, Cororaton said, new contracts are up 16% nationwide compared with last year. She described this current wave of homebuyers as mostly millennials as old as 40 who had planned to buy homes this year but might have shifted their timeframes due to the uncertainties associated with the nationwide shutdowns.
Kellie Langley, a Towson-based agent with Coldwell Banker, said the pool of buyers and sellers has been reduced mostly to those needing to move for urgent reasons such as a new job or a divorce and they are serious.
“I’ve never been as busy as this spring and summer,” Langley said. “There’s been such a great amount of activity based on the amount of inventory. Things are selling quickly and often with multiple offers on the same property — it’s the perfect storm.”
Langley said clients have been expressing a preference for houses in Baltimore County specifically for the past 18 months, but inventory shortages and lower than average mortgage rates have accelerated even more activity. With the pandemic, she said, she’d also heard concerns about having enough space for families with children and adults working remotely.
“For a lot of people who didn’t have a home office to begin with, they’re realizing how valuable that could be,” she said.
Susan Lawton is moving Friday to Owings Mills from Harrisonburg, Virginia, to be closer to her daughter and her family, especially during the pandemic.
“We did Zoom once a week, but it’s not the same as being in the same place,” she said.
She started searching for a new home last fall and closed quickly on a house with a first-floor master bedroom and patio.
Survey data released by the National Association of Realtors’ Research Group shows nearly 40% of agents represent buyers with increased urgency to purchase homes because of delays related to the pandemic. Another 21% of agents reported buyers seeking the benefits of new homes, such as office space or backyards.
And as parts of the country reopened, employment improved in June and people received as much as $2,400 per household in federal stimulus money. Consumers flocked back to the market after an unusually slow spring, which usually represents the peak time for listing.
Finnegan said spring’s decreased activity has spurred overwhelming demand now.
“The spring market, which is so huge in residential real estate — we didn’t have that this year,” Finnegan said.
After a slow spring, supply may be starting to bounce back. New listings increased 11% over May to 4,440, Bright MLS reported. Still, the figure was a seven-year low for the month of June and 8.9% lower than June 2019′s total of 5,440.
The lack of inventory coupled with rebounding demand has buyers paying closer to the asking price than they have in 10 years. On average, buyers paid 98% of the original list price, Bright MLS reported.
Median sales prices increased in the metro area overall, rising 5.8% in Baltimore County to $275,000 compared with June 2019, 1.9% in Howard County to $454,000 and 0.1% to $378,500 in Anne Arundel. Median prices were unchanged in Carroll County at $345,000, but dipped 2.1% to $164,000 in Baltimore City and 2.8% to $275,000 in Harford County.
The National Association of Realtors’ data shows that most buyers, 76%, did not change their preference for a new home location because of the pandemic. But those who did overwhelmingly preferred moving to a suburban area, followed by rural areas and small towns.
Cororaton said the evolving shift toward the suburbs could become more pronounced as the pandemic continues to disrupt American work routines, especially as companies offer more flexibility for employees and more industries pivot to remote offices.