Demand dips modestly, prices remain high in area housing
Despite the lifting of all coronavirus-related restrictions throughout the state, the Baltimore-area housing market continued to feel the effects of the pandemic in June.
Housing prices reached an all-time for high for the third straight month, and the number of closed home sales also hit a record. The median number of days that homes spend on the market remains low, with many homes selling in less than a week, according to the latest figures from Bright MLS, the region’s multiple listing service.
Meanwhile, entry-level buyers and those in search of affordable housing options have been squeezed out of the market, as home and construction prices soared. A new tool used by Bright MLS shows a slight decline in demand for homes compared to earlier this year, though it still remains high.
Economists and experts in real estate and finance said prices will remain high until the gaps in supply fill out.
“Home prices are not going to come down dramatically until we get more housing options on the market,” said Seema D. Iyer, associate director of the Jacob France Institute at the University of Baltimore. “That’s basically the wild card: We don’t know when, and how and if that’s going to open up.”
Here are additional insights extracted from the Bright MLS housing market update for June:
Median sales prices
Homes in the Baltimore metro area sold at a median price point of $355,000, a jump of about 15% compared to both June 2020 and June 2019.
Median means half the homes sold in June sold for more than $355,000 and half sold for less. May’s median sales price was $341,000.
Certain counties had particularly strong sales in June. Harford County homes hit an overall record high median of $335,500 — a gain of 22% from last year — and detached homes in Anne Arundel, Baltimore and Carroll counties, and Baltimore City, reached highs of $500,000, $375,000, $442,000, and $290,000, respectively.
Iyer said the market has helped raise property values in neighborhoods that historically might not have seen much housing activity.
“The questions we all have is, what’s that going to look like when we see neighborhoods that didn’t get that [attention], and how is that going to exacerbate inequality?” she said.
Closed sales
New closed home sales hit a decade high in June of 5,146.
That’s a gain of 19% over the previous month. Year-to-date, there’s also been a 26% increase of homes sold compared to last year and a 32% rise in sales compared to 2019.
Town home sales fared especially well in Anne Arundel (335), Baltimore (389) and Howard (178) counties, and Baltimore City (895).
New pending sales, however, dropped 5.5% in June compared to May and 2.1% compared to June 2020, indicating a possible slow in interest from buyers after months of dizzying demand.
Median days on the market
Homes are spending a median of just six days on the market for a third consecutive month.
That’s down from a median of 14 days at the same point a year ago. Housing activity picked up midsummer last year, with the median number of days on the market dropping to single digits in the months since.
Homes were selling at a median of 17 days on the market in June 2019. In the previous 10 years, the median was as high as 38.
Baltimore, Harford and Howard counties saw medians of just five days last month, with Anne Arundel, Carroll and Howard having homes sell at a median of six days. Baltimore City homes sold after a median of eight days on the market.
Inventory
The supply of homes for sale in the Baltimore area has improved, but what’s available would be sold in less than a month at the current sales pace.
More than three month’s supply of inventory existed in June 2019, and that number dropped to less than two month’s supply in June of last year amid the coronavirus pandemic and related shutdowns. Few people opted to sell their homes given the stay-at-home orders and travel advisories.
Iyer said the pressures of supply and demand may continue to play out until three to six months of supply is available. It could take up to a year before buyers start to feel some relief, she said.