Baltimore’s real estate market slowed dramatically in April as the coronavirus pandemic continued to disrupt the normal behavior of the state’s economy — and potential sellers and buyers.
The number of homes sold last month fell to a five-year low, while new listings of homes for sale plunged to a 10-year low, according to new data. However, the data published Tuesday by Bright MLS also shows that local homebuyers have laid claim to much of the available housing inventory, a phenomenon that experts and real estate professionals said gives them confidence the market will rebound quickly once Maryland begins to ease its stay-at-home restrictions.
Just over 3,000 homes sold in the Baltimore region, which includes the city and Anne Arundel, Baltimore, Carroll, Harford and Howard counties, the MLS data shows. That’s the lowest level for April since 2015.
New listings in the region stood at 3,628, the fewest in a decade for April, which is a prime month for putting homes on the market.
But, with less inventory to choose from, buyers were bidding properties up and moving more quickly. The region’s median sales price jumped by $25,000 to reach $300,000 in April, the highest for that month in the past 10 years, the MLS data shows. Meanwhile, many homes were sold in less than two weeks as the median number of days on the market dropped to 12 days in April from 27 a year ago.
“What’s out there is selling, and selling at a good price,” said Chris Finnegan, a spokesman for Bright MLS, which represents thousands of real estate professionals in the Mid-Atlantic region. “People are just not as apt to put their stuff out there during this window.”
Amid the unpredictable financial climate, potential clients are more risk-averse, whether to attempt to sell or buy a home. Either requires interaction with others outside their immediate family, whether it’s having strangers tour your home or touring someone else’s home.
People also are more worried about their personal finances and jobs. Nearly one in five workers in the state have filed for unemployment benefits since the COVID-19 outbreak reached Maryland in early March.
The future of the housing market may depend heavily on the welfare of these workers, many of whom may not be able to pay rent or cover their mortgage costs until state officials lift the restrictions on the economy, said Anirban Basu, chairman and CEO of the Baltimore-based economic consulting firm Sage Policy Group, who also spoke on the Facebook webcast.
Even with Republican Maryland Gov. Larry Hogan’s order temporarily halting evictions and foreclosures, Basu said many banks and landlords eventually will “have to do the capitalist thing” to stay afloat.
“Even absent a government mandate, ultimately a lot of these real estate investment trusts are on the hook for generating returns,” he said. “This pandemic did not respect the preexisting momentum of the economy. COVID-19 won.”
Buyer wariness shows in the MLS data for new pending sales. Just 3,159 properties went under contract in April, an eight-year low for the month and 35% fewer than a year ago.
Finnegan attributed the rising median price to the limited housing stock available as well as historically low interest rates pushing buyers to capitalize on the moment.
“If you have the means and you know something’s out there, it’s a good time to buy,” he said. “But, because of the complications, there’s just not a lot out there.”
Lawrence Yun, chief economist and senior vice president of research at the National Association of Realtors, said in a Facebook Live webcast May 6 that home inventory already was limited before the start of the pandemic.
“We were in good shape going into the pandemic, but there’s not enough inventory of homes for sale, especially at affordable price points,” he said. “People who have safe employment, they’re looking at these low mortgage rates, and that’s where the movement will occur.”
Some in the real estate business suggested the stay-at-home restrictions spurred by the pandemic could motivate buyers looking for more space.
With more workers confined to working from their homes and responsible for caring for their children throughout the day, some families might seek immediate accommodations, such as more square footage, more yard space and more distance away from neighbors, said Cindy Ariosa, senior vice president and regional manager of Long & Foster Real Estate.
“We think it could be a real boom for the first-time homebuyer,” said Ariosa, who also serves on the Bright MLS executive committee and as a board member. “The need for shelter has awakened people to take advantage of the low interest rates.”
She added that industry professionals have been offering virtual and appointment-based home tours and conducting settlements in parking lots to maintain business.
Finnegan said a decrease in the number of median days on the market in jurisdictions such as Carroll, Harford and Howard counties could indicate a shift toward suburban living and away from urban walk-ability and public amenities.
“We’re hearing that all the time,” he said. “The situation is so connected to the stay-at-home development.”
While some have compared the economic shock of this pandemic to that of the financial crisis of 2007 and 2008, which the economy took years to recover from, Finnegan said today’s economy — and the housing market along with it — likely will recover in full, and fast.
“I can easily see the dam bursting and a lot of properties hitting the marketplace,” he said. “People are holding off on buying and selling because this is a unique time. But this is encouraging news that they’ll do that once things improve and stabilize.”