If you shopped for a home in 2017, you probably got a little frustrated. The inventory levels were lower across the board, with an average of 20% fewer homes on the market than 2016. Many of our clients placed offers on many homes before getting one under contract, and even then, they would get used to hearing “we have multiple offers and need your highest and best!” Motivated buyers took heed and paid what they thought the home was worth; others skeptically chose to keep looking.
The year ended on a robust level. Personally, it was my best year in the decade I’ve been helping people buy and sell homes, but keep in mind I started just after the boom that ended abruptly in 2007. Total sales dollar volume was up 9.10% in the Mid-Atlantic region, and the median sales price jumped 4.52% to $324,000. The number of homes sold was also up, increasing by 4.6% over 2016. Despite that, it took less time to sell a home in the Mid-Atlantic market, with that figure dropping by almost 15%!
There was a point during the year where sales were lagging 2016 and people started to panic (including me!). But this was a function of the lack of inventory, and if you looked closer, you could see that the market was still quite healthy. My favorite indicator of a strong housing market is the absorption rate, which is how many months of inventory there are in a particular area. If you simply look at the number of active listings right now in the Mid-Atlantic region (32,985) and divide that by the number of homes sold in the current month (we’re using November, and there were 10,749 homes sold), then you get a rough number of 3. That means it would take about 3 months to clear all of the inventory out there right now, which is phenomenal. Some areas are even less; for instance, where my office is in Edgewood, MD, right now the absorption is only 2! There are 70 active listings on the market there with 35 homes sold in November. Economists tell us that a healthy market is an absorption of 4 or less.
Other factors will contribute to what we will see in 2018. The unemployment rate is steady at 4.1%, and full employment is considered at 4%, which means you can’t get any lower. There is a natural cycle of job turnover and attrition that prevents a true “100% employment.” Because of this, wages will continue to rise; this year they jumped 3.22% from January to September, and we can expect this to continue. Also, the stock market has been one of the stories of the year in the business world; the Dow is hanging around 25,000, proving that corporate market values are flourishing.
If you add these up and factor in mortgage rates, which are somehow lower than they were in January, and rental rates that continue to climb, we can expect buyers to be out shopping in packs trying to take advantage of a prime home shopping season, and since home prices already started the upward trend last year, home Sellers are aware of where they’re going to continue to go. Buckle up your seatbelt and get ready to move!
No need to speculate about what the real estate market in Harford County has done this past Summer; I have the data to show you, along with some insight into what it all means. I can admit that while I usually try to get this info out monthly, I’ve been too busy the past three months to do the research. Despite that, you’ll be surprised at the evidence to the contrary.
If you’ve been home-shopping the past few months, you probably ran into a competitive bidding situation, encountering the dreaded “request for highest and best.” This is where the seller receives multiple offers (good for them) and asks all bidders to provide their strongest offer, usually associated with a strict deadline. And it’s getting out of hand; agents and sellers are sitting on offers until they get more than one just so they can force the bloodshed!
But the data suggests that this will not last, at least not in Harford County. There were 26 fewer homes sold in the County in 2017 compared to 2016, which was a drop of about 2.2%. The median sold price went up, though, since sellers were asking a little more for their homes this year. Last year’s median sale price was $252,100, compared to $254,000 this past summer. The big story has been about active listings, which has reduced across the country. Last summer, there was an average of 1,275 homes on the market, compared to 1,010 this year. That’s a dip of 19%, or 1 out of 5 homes. To put this into context, imagine you were out shopping for a house and of the 5 from which you were about to choose, one was taken away. And add to that the fact that 5 other people are also shopping! There really aren’t enough to go around.
In addition to the fact that fewer homes sold this summer compared to last, there are also fewer homes under contract. This suggests that fewer homes will go to closing over the next two months, further continuing the cycle. But hold on before you cry recession! This is a natural correction since so few homes are on the market. We expect that since there is certainly an inventory shortage in Harford County, those of you that have homes to sell will be ready to list soon.
So, what do I expect from next summer in Harford County? I expect humidity, mosquitoes and traffic jams along route 22! Oh, as far as the real estate market, I expect more inventory to hit the market, but not enough to compensate for the 20% deficiency. I also expect more sales from 1st time buyers as they snatch up the homes from families that choose to move up or even build.
If you would like more information to help you decide whether it’s a good time to buy or sell, feel free to call me at (443) 866-6728 or email firstname.lastname@example.org.
The real estate market in my small hometown of Havre de Grace, MD had me worried for a second, since sales were flattening, inventory held firm and median sales prices looked just like they did last year (the last time we reviewed the market was October 2016). While it hasn’t done anything to change my concern, it has made some positive changes.
The total real estate sales volume was $5.16 million (the most recent full month for which we have sales), which was down just slightly from last March. There were 23 homes that received new owners during the month, which was a drop of a single home. A sign of alarm was the time it took to sell a home in Havre de Grace, MD during March of 2017, since it took 131 days to sell during that period! That was a 40% increase from the same time 12 months prior.
Another sign of sales mediocrity was the number of new listings on the market in Havre de Grace. There were 119 total active listings, which was only 4% less than March, 2016. As we’ve mentioned elsewhere, most adjacent markets are seeing as much as 20% lower inventory, and fewer homes for sale has helped prices improve; it also helps homes sell faster. A positive sign is that the number of pending sales is up 13% to 58, which shows that the coming months might see positive sales gains in Havre de Grace.
Some of you might recognize the highest-priced sold home in Havre de Grace for the month. It belonged to the late Dr. Gunther Hirsch, the obstetrician and former mayor that helped deliver a number of you reading this! His home had just over 2,700 square feet, a half acre of land and located at 605 Giles St. It sold for $439,000. A picture is below courtesy of MRIS.
The market in White Marsh has continued its steady roll, but there wasn’t a significant pop in sales during March of 2017. The volume, as usual, was mostly in the 21236 zip code, but there was some action in the 21162, mostly due to the developing that Ryan Homes is doing there in two different communities.
The total volume was steady at about $9.5 million in March, 2017, which was a 2% bump over the same month a year ago. 43 homes sold in the area, which, while more than many similarly sized zip codes, was only 2.38% over the same time last year, which represented an average sales price of $221,000. It took slightly less time to sell a home, with the days on market dropping to only 71 days.
The main story in most markets has been about homes inventory, which has reduced by about 20% in most nearby markets, but real estate listings in White Marsh, MD has stayed relatively firm. The number of active listings on the market when the statistic was recorded was 99, which was only 7.5% less than last year, so even though the inventory is lower than last year, the pace at which it has dropped is lower than most nearby markets.
Another factor that should be considered in White Marsh, MD is the number of pending sales, which are the number of homes currently under contract. This is the single best near-future indicator of homes sold, and in this market they are down considerably. The number of pending sales was 75 in March, 2017, which was a 24% drop over a year ago, suggesting that the either the market may be cooling down, or that March was just an anomaly; this is something we certainly need to keep an eye on.
The highest sales price took place in the Red Lion area of the 21162 zip code at one of Ryan’s newest communities. It was on Autumn Terrace drive, which is off Red lion rd., which is parallel to route 40 and off Ebenezer rd. Since it’s new construction, it had a base price of $454,990, and after all of the upgrades, the final sales price was $547,000. A picture of the property is below. (picture courtesy of MRIS).
We’ve seen most Harford County real estate markets catching fire lately, with inventory being constrained and bidding wars on most well-priced homes. And the same has been happening in Bel Air, MD, even though slight differences exist between the 21014 and 21015 zip codes.
The 15 has been the more robust, although both areas have been strong for sellers. The market there jumped 21% to 34 homes sold in March 2017, and while there were more sales (37) in the 14 in March, it was a 7.5% drop from March of 2016. Another point of note was that there were 11 condos sold in the 14 to only 1 in the 15, and since these were lower in price to the other properties sold, this substantially affected the overall results in that zip.
The prices were up in both zips, jumping 5.7% in the 15 and a sharp 10% in the 14! It took less time to sell a home in each market, taking 66 days in the 15 and only 39 in the 14, on average. Both markets are becoming constrained since there are so few homes in comparison to the rate of sales. The absorption rate (the amount of time it would take to clear out homes inventory if there were no new listings) dropped to 2.9 months for Bel Air, MD overall (including both zips), and overall inventory was 206 active homes when the measurement was taken.
Finally, the highest home sale took place in Glenangus and sold on March 10 for $716,750. A picture of the 4,000+ square foot home is below.