After two and a half years of robust price growth, home prices in the Mid-Atlantic have been relatively flat for the past three months, according to a new report from Bright MLS. However, homes continue to sell very fast and the lack of new listings suggests that prices in the region may have bottomed out and could be set to rebound.
Bright MLS Monthly Mid-Atlantic Housing Report for May found that both pending and closed sales increased, reflecting seasonal patterns, but pending sales were down 19.3% and closed sales were down 20.2% compared to last year at this time. Persistently high mortgage rates have sidelined some buyers, but a lack of inventory continues to be a major constraint on the market and is the primary reason prices are holding firm across most of the region. The number of active listings on the market totals just 42% of available listings in 2019.
Key highlights:
- The median home price in the Mid-Atlantic region in May was $400,000, the highest sales price on record, a 0.3% increase over a year ago.
- The median days on market in the Mid-Atlantic region was 7 in May, the fastest pace of home sales transactions since last June.
- Showing activity remains below last year’s level (-21.8%) as would-be buyers have relatively few homes to view.
- The number of new listings coming onto the market is at a two-decade low, down 29.1% compared to a year ago.
- Philadelphia metro area:
- Despite elevated mortgage rates, the median home price in the Philadelphia metro area was up 2.1% in May. Home prices have risen for 69 months in a row, reflecting strong demand, low supply and the relative affordability in the region.
- The market looks different depending on whether you are in the city or the suburbs. In some suburban markets, home prices are still rising very quickly as inventory continues to shrink compared to a year ago. In Philadelphia proper, however, inventory is back at near-2019 levels and prices have fallen or remained flat for 11 months in a row.
- Baltimore metro area:
- While mortgage rates are definitely a factor in the market, a bigger constraint in the Baltimore region is a lack of supply. The number of active listings increased by 5.0% in May, but supply is still only about a third of what it was in 2019. Home shoppers are competing for very few homes, with the number of new listings coming on the market at its lowest May level in more than two decades.
- The low inventory has meant that homes are selling faster than they have since last summer. While the median home price in the Baltimore metro area is unchanged from a year ago, the average sold-to-list price ratio hit 101.6% in May, the highest level since July 2022. Sellers still have the upper hand in the market, finding ready buyers if they have priced their home appropriately.
- Washington DC metro area:
- The median price in the Washington, D.C. region was $600,000 in May, the highest in the Mid-Atlantic region. Prices have fallen for 3 months in a row, down from the peaks of last year, but are still about 30% higher than they were before the pandemic.
- Limited inventory is a major obstacle to home buyers. With just 1.23 months of supply in the market, inventory is less than half of what it was in 2019 and new listing activity is at a more than two-decade low.
Major takeaway:
“There is a pool of ‘shadow’ buyers that could be waiting for mortgage rates to drop this summer,” said Lisa Sturtevant, Bright MLS chief economist. “However, renewed buyer interest may not translate into more transactions if there is not more inventory. Lower mortgage rates could entice some homeowners to list their home, but it likely won’t be enough to shift the balance in the market.”
For the full report, with more in-depth regional data, click here.
