Comparing This Crazy Market to a Normal Market Year
How does this year compare to our last normal market year?
It’s no secret that a lot has changed within the real estate industry in the last year. Now that we’re in June, we wanted to bring you a mid-year market update to let you know how the first five months of this market year are doing compared to the first five months of 2019 (our last normal year) and what we expect moving forward.
Let’s start with inventory, which has been the driving force behind the competitive conditions in this deep seller’s market. Year to date, we’ve seen 13% fewer listings come on the market than in 2019. That has contributed to the buyer frenzy we’ve witnessed, but thankfully we’re starting to feel a little bit of relief as more listings come on the market. That’s in part because things are loosening up in terms of COVID restrictions.
In terms of demand, we’ve seen 6% more sales this year than in 2019. That doesn’t seem like a lot, but when you combine it with the fact that we have 13% fewer listings, that’s a 20% total swing in the supply and demand. The buyer frenzy doesn’t look like it will slow down much since our low interest rates are making homes more affordable.
"Nothing leads us to believe that our market conditions will substantially change anytime soon."
Normal appreciation tends to trend a percentage point or two above inflation, meaning that 3% to 4% inflation is considered healthy. That’s been consistent in the Baltimore metro area since 2011, but last year appreciation spiked to almost 10%. Fun fact: Over the last 10 years, our area has appreciated by about 40%, so if you’ve owned a home in that time, you’ve seen your price go up pretty substantially. With word spreading that home values are at all-time highs, people are scrambling to put their homes on the market. The average sales price in our area is $342,000, which is the highest it’s ever been.
If you’re thinking of entering the market but are concerned that now isn’t the right time, know that while we’re seeing some relief in terms of inventory, nothing leads us to believe that our market conditions will substantially change anytime soon. Real estate is like the Titanic—it changes direction very slowly and can take quarters for new trends to develop.
If you have any questions about how today’s market conditions affect you or someone you know, please feel free to reach out to us. We’re happy to answer any questions you have.