Real Estate Analysis and Commentary in [CITY]

Current Market….

The dogdays of summer continue, and the real estate market continues to perform in the face of what seems like never ending rate hikes from the Federal Reserve.  The Federal Reserve’s fight on inflation has impacted mortgage rates significantly since January 2022, the 30-year fixed rate is currently hovering around 7%

Just for historical purposes, 1981 was the worst for mortgage interest rates with the average mortgage rate at 16.63%.  A more recent blip was in 2008 during the end of the mortgage meltdown where rates were at 6.03%.  Since the 2008 mortgage slump to early 2022, mortgage rates trailed down to a low 3% range for a 30-year fixed rate mortgage.  Traditionally, as interest rates have increased home values have trended in the opposite direction.

There have been dips in home values during times of high interest rates in the past 30 years, but home values have always recovered quickly.  From a historical perspective, homebuyers would think that home prices should decrease as interest rate increase. It this market, home prices continue to rise, albeit at much slower rate.  What are supporting home values-lack of inventory.   The most recent statistics from the Maryland Association of Realtors revealed a statewide 4% increase in median home prices from 2022 to 2023. Not all counties in Maryland produced the same results, some did have median price decreases like Calvert Country at -12.4%. In the counties around Washington, DC, the results were just the opposite with median home prices increasing Montgomery County, +6.5%, Prince Georges County +7.4%, Howard 15.9%.    The average active inventory on the market dropped from 12,809 units in 2022 to 8,247 units in 2023 which represents about 35% fewer homes on the market. 

So, what is a homebuyer or seller to do in this market? If you are a buyer, understand that values are probably not going to decrease in the foreseeable future.  Finding a suitable home and locking in a price today, even at higher interest rates may be the correct path to follow with the idea that in the future refinancing is a possibility as rates trail back down. If you are a seller, homes are selling quickly and appreciation is not at the double-digit pace as it has been in the last 3 to 5 years, but home values will continue to increase. Sellers still need a cutting-edge marketing plan to present their home to as many buyers as possible through different advertising venues to produce the greatest number of buyers.    In either case, buyers and sellers need a qualified real estate professional who understands the nuances of the market.

 Jeffrey Vinson, SRA, GRI is a Certified Residential Appraiser in Maryland, Virginia and Washington, D.C and an Associate Broker with Samson Properties.  Go to https://jeffvinson.samsonproperties.net to search for your next home.  You can discuss your real estate with Jeff at 301-638-8084 or email jeffvinson@outlook.com.

 

 

 


Posted in:Real Estate and tagged: Montgomery CoMaryland
Posted by Jeffrey Vinson on August 27th, 2023 2:59 AMLeave a Comment

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