Bright MLS October Housing Report: It's Beginning to Look A Lot Like Last Year
Tuesday, November 14th, 2023
High mortgage rates, unrelenting prices, and low inventory have limited transactions throughout the Mid-Atlantic so far in 2023. Yet October showed the first signs of being similar to activity levels in 2022. New pending sales were only 3.2% lower than last year and some metros within the Mid-Atlantic had more new pending sales, and even closed sales, than in October 2022.
"The resiliency of the market in the face of mortgage rates approaching 8% has been impressive," said Dr. Lisa Sturtevant, Bright MLS Chief Economist. "While the market is expected to slow this winter, as it always does seasonally, the Mid-Atlantic may finally start to trend alongside 2022 activity."
New listing activity has typically been 20-30% below what occurred in 2022. In October 2023, there were 21,517 new listings across the Mid-Atlantic. Excluding January, this is the narrowest difference between the two years. Moreover, akin to new pending sales, some pockets of the Mid-Atlantic are seeing more new listings than last year.
Additional new listings are a welcome sign. Overall Mid-Atlantic inventory remains at a deficit compared to the number of homes on the market last year. The 34,415 active listings available at the end of October 2023 were 6.0% less than the number in October 2022. Inventory has been improving since the summer and gains throughout the winter could help buyers persisting in the market have more choices, or provide opportunity for buyers who may bide their time until spring.
Whether buyers purchase now or wait until the new year, the market will be competitive. Half of the homes sold in the Mid-Atlantic in October were only on the market 10 days or less before being scooped up by an interested buyer. While there's been a little relief since the June, the swift pace of buying hasn't returned to pre-pandemic norms keeping buyers on their toes.
In October, the median sale price in the Mid-Atlantic region was $381,000. Though declining from the summer, the median price is up 4.7% compared to a year ago. The seasonal easing won't likely impact the monthly payment enough to entice buyers. Lower mortgage rates on the other hand could make a difference to the bottom line.
And looking into 2024, the consensus is that mortgage rates will begin to come down. Mortgage rates will remain well above 6% forcing consumers to reset their expectations and understand that 3% aren't coming back. Still, rates moving back towards 7% and below will encourage more activity from both buyers and sellers suggesting a blooming spring market in the Mid-Atlantic.
October Mid-Atlantic Housing Market by Region
Buyers Still Active in the Philadelphia Market
Home prices up strongly in October
The Philadelphia metro continues to struggle with inventory, though buyers remain active and willing to make quick offers and pay for attractive homes.
Inventory continues to track lower than last year, but active listings have been increasing for three consecutive months. At the end of October, there were 10,602 active listings across the region, nearly 10% lower than a year ago, but up 3.8% compared to September.
Limited inventory continues to put pressure on prices and the median price continued trending above 2022 in October. At $350,000, the median price in Philadelphia last month was 7.7% higher than last year. That's the fastest annual price growth since August 2022.
In October, there were 5,622 new pending sales across the Philadelphia metro area, which is only slightly lower than last year's level, down by just 1.4%. This month marks the smallest year-over-year decline in new pending sales this year.
The Bright MLS T3 Home Demand Index (HDI) for the Philadelphia metro rebounded from last month, though still points to slower market conditions.
Housing Market Remains Strong
Fastest home price growth in more than a year
Buyers persist despite facing near 8% mortgage rates. Low inventory keeps the market competitive, pushing prices to grow.
The number of active listings was virtually the same as it was a year ago, and inventory has increased month-to-month for three consecutive months. Low inventory has led to a persistently competitive market and rising home prices.
With the supply still very low by historic standards, it's a brisk market in the Baltimore metro. Homes are selling quickly, with the median days on market of just 9 in October.
The median sales price in the region was $369,000, up 7.0% compared to a year ago, the fastest annual price growth since September 2022. Prices fell seasonally between September and October.
Sales activity is still lower than last year, but the gap has narrowed. In October, there were 2,633 new pending sales across the Baltimore metro area, down 7.3% compared to last October, the smallest year-over-year difference this year.
Housing Market Activity Slows Seasonally
But prices still on the rise as inventory remains low
Market activity isn't able to sustain the pace of last year as mortgage rates move closer to 8%. However, prices continue to make gains as low inventory fosters competition for buyers searching for a home.
There were 3,752 new pending sales in the D.C. metro area, which is 136 fewer pendings than there were in September. Pending sales activity is 9.2% lower than a year ago. However, the gap between 2022 and 2023 monthly pending sales is at its lowest level of the year.
However, even though activity is constrained, prices are still rising and homes are still selling quickly. The median days on market in October was 9, which is nearly a week faster than last October.
The median price in October was $568,000. The median price is 3.3% higher than a year ago and is also up 3.3% compared to a month ago. Home prices peaked during the summer, which is a typical seasonal pattern. However, prices have been up year-over-year for 5 consecutive months.
New listings remain limited. There were 4,460 new listings coming onto the market in October, down 20.3% compared to last year. New listing activity was also down from September.