Maryland home prices increase as supply drops

Home prices in Maryland increased last month, but fewer homes sold in February compared to the same time last year.

Maryland Realtors’ data found the average home price increased statewide by 1.5 percent for the second consecutive month. Median prices throughout the state were up 6.6 percent from the same time last year.

According to data provided by MarketStats by ShowingTime based on listing activity from Bright MLS, the median sales price in the Baltimore metro increased 6.5 percent, about $15,000, from last year.

At the same time, new contract activity was down 3.5 percent from last year. The number of new listings dropped 1.3 percent from last year, and active listings fell 12.7 percent. Year-over-year inventory levels have now decreased in the metro market for 30 straight months.

“The active inventory across the state continues to be below what is considered a normal level. Steady increases of mortgage interest rates could potentially impact market activity, but it is currently a wait-and-see situation,” Maryland Realtors President Boyd Campbell said in a statement. “Historically, increases in interest rates have fueled market activity.”

The state has struggled in recent months with constrained supply as demand increased, driving up prices. The lack of supply can be attributed to several factors, ranging from homeowners, still licking wounds from the 2008 financial collapse, remaining leery of buying a bigger home and taking on more debt, to state and local restrictions making it more difficult to build new product.

Montgomery County and Prince George’s counties posted year-over-year median sales price increases. The median price for a Prince George’s County home increased 4.9 percent compared to February 2017, with Montgomery County’s median prices rising during the same period by 5.3 percent. The D.C. metro area, which includes the city and Northern Virginia, increased by 2.6 percent.

The number of sales in Prince George’s County increased by 4.1 percent last month compared to February 2017. Montgomery County home sales in the same time frame dropped by 12.4 percent. Overall, the D.C. metro area experienced a 1.8 percent decline in sales.

The Washington suburbs also are contending with a limited supply of homes on the market. The inventory in Montgomery County fell by 11.5 percent and Prince George’s County’s supply fell by 4.9 percent. Overall supply in Washington metro area was down by 13.5 percent.

Chi Yan, of The Chi Team at Keller Williams Legacy Metropolitan, said he’s representing more sellers at this time, and he’s seen strong demand for homes. A listing in Upper Fells Point he posted to the multiple listing service on Monday as “coming soon” already attracted an email from an agent inquiring about showing the property that evening.

“I know agents are really trying to find a property for their clients,” Yan said.

Currently there’s no indication a building boom is rising in the state to meet demand, particularly from first-time buyers. National numbers released in January showed increased home construction nationwide but that building in the Northeast continued to lag.

According to figures from the Maryland Department of Planning in January 2018, the latest figures available, there were 983 single-family homes authorized for construction in January of 2018. At the same time last year there were 915 single-family homes that were given the OK to start building.

Of the single family homes approved to start construction in January, nearly 39 percent were in the six counties that make up the Baltimore metro area. New construction starts in the Washington suburbs, which include Prince George’s, Montgomery and Frederick counties, represents 38 percent of the state’s total.