Bright MLS August Housing Report: Home Prices Up Strongly in the Mid-Atlantic Despite record high mortgage rates, low inventory continues to drive prices higher
- The median home price in the Mid-Atlantic region was $401,000 in August, up 5.5% compared to a year ago and only slightly below the all-time high recorded in June.
- A lack of supply—and not high mortgage rates—continues to be the biggest constraint in the market. The number of homes available for sale at the end of August is down 11.4% compared to last August, and is more than 60% lower compared to the inventory available five years ago.
- Despite fewer buyers, The median days on market has been declining steadily since the beginning of the year and homes continue to sell very quickly, often with multiple offers and offers above list price.
NORTH BETHESDA, Md., Sept. 12, 2023 /PRNewswire/ -- Even as mortgage rates hit a two-decade high, home prices across the Mid-Atlantic continue to rise, reflecting the push and pull between unrelenting demand and low supply in the market, according to the Bright MLS Mid-Atlantic August Housing Report released today.
"Despite the run-up in home prices across the Mid-Atlantic in recent years, housing remains somewhat more affordable than in the high-cost West coast markets, which is why prices have largely been immune from declines some other parts of the country have seen in 2023," said Dr. Lisa Sturtevant, Bright MLS Chief Economist. "However, affordability is becoming a bigger challenge, with mortgage rates above 7%, and will push more buyers out of the market."
In August, the median sale price in the Mid-Atlantic region was $401,000, up 5.5% compared to a year ago. Similar to July, condo prices rose fastest, 9.7% year-over-year, followed by townhomes, at 7.6%, which reflects buyers turning to options that are more affordable.
Sales activity continues to track below where it was a year ago, but the gap has been shrinking. There were 19,898 new pending sales in August across the region, down 17.3% from a year ago. The number of closed sales was 17.2% lower than last August.
Low supply continues to constrain buyer activity. After rising earlier in 2023, the number of active listings in the Mid-Atlantic has declined for three consecutive months, down 11.4% compared to a year ago. The number of homes available for sale is less than half of what it was in 2019.
That low inventory means that the market continues to move quickly. The median days on market in August was 8, meaning half of all homes sold in the Mid-Atlantic last month sold in 8 days or less.
The Mid-Atlantic region's most affordable markets generally saw the strongest price growth in August. Prices were up 7.7% in Central Pennsylvania and rose by 10.1% year-over-year in the Maryland/West Virginia Panhandle. But prices were up broadly across the Mid-Atlantic, including in some second home markets such as the Del/Mar Coastal area (+11.0%) and the Maryland Eastern Shore (+22.0%).
Looking ahead, expect new listing activity to remain low throughout the rest of the year, though there will be small gains in month-end active listings as sales activity contracts. Overall, though, the Mid-Atlantic housing market will still be unbalanced, with more buyers than sellers, which will continue to support stable prices in most local markets.
Key Market Takeaways
Philadelphia Metro Area: Home Prices Up Again in August, High mortgage rates have not slowed price growth in the Philadelphia area market
In August, the median sales price in the Philadelphia metro was $370,000, matching the region's record high and up 5.7% from a year ago. Prices have risen faster in the Philadelphia area than in many other parts of the country, fueled by strong demand, low inventory and relative affordability.
Inventory is incredibly low in the region. The tightest inventory in the region is in the suburbs where there is less than 1.5 months of supply.
New listing activity is expected to remain very low throughout the rest of the year. While there will be small gains in month-end active listings as pending sales activity contracts, supply is still going to be very low, and prices will likely continue to rise.
Baltimore Metro Area: Record High Home Median Sales Price in August, Price growth continues in the Baltimore metro area
In August, the median sale price in the Baltimore metro area was $385,000, a record high matching the June 2023 median price. Prices rose 4.6% regionwide between August 2022 and August 2023 and the median price is more than 30% higher than before the pandemic. Prices continue to rise despite persistently elevated mortgage rates.
Affordability is a growing challenge for homebuyers, but despite high rates and rising prices that have led to higher payments, buyers still remain active in the Baltimore area market. The region's suburban submarkets have remained particularly competitive.
Low inventory continues to drive price growth and there is no expectation of significant supply increases this year.
Washington D.C. Metro Area: Home prices slid over the summer but remain high, Competition remains strong in the Washington, D.C. area housing market
In August, the median home price in the Washington, D.C. metro area was $585,000 which is down from the peak of $600,000 in June. However, prices are still rising year-over-year, with the August median home price up 5.4% compared to last year at this time.
Compared to a year ago, prices are rising fastest for townhomes and condominiums, which tend to be more affordable than single-family detached homes in the Washington area. But more buyers are being priced out of the market. New pending sales are significantly lower than they would be in a more typical housing market, and showings are also down.
Expect new listing activity to remain very low throughout the rest of the year. There will be small gains in month-end active listings in the Washington, D.C. metro area as sales activity contracts. Supply will still be an obstacle to a balanced housing market, and home prices should remain stable in the region this year.
August Mid-Atlantic Housing Market by Region
About Bright MLS
Bright MLS was founded in 2016 as a collaboration between 43 visionary associations and two of the nation's most prominent MLSs to transform what an MLS is and what it does, so real estate pros and the people they serve can thrive today and into our data-driven future through an open, clear and competitive housing market for all. Bright is proud to be the source of truth for comprehensive real estate data in the Mid-Atlantic, with market intelligence currently covering six states (Delaware, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia) and the District of Columbia. Bright MLS's innovative tool library—both created and curated—provides services and award-winning support to well over 100K real estate professionals, enabling their delivery on the promise of home to over half a million home buyers and sellers monthly. Learn more at BrightMLS.com.
The full Mid-Atlantic and new area reports are available at BrightMLS.com/MarketInsights.
SOURCE Bright MLS
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