How a Drop in Buyer Competition Will Affect the Housing Market in Maryland

The housing market across the country is changing. Here's why and how those changes will affect our local market.

COVID-19 changed everyone’s lives in an instant. During the early days of the pandemic, many were on lockdown, working from home, and reevaluating what they really wanted their lives to look like. Many moved closer to their families or to areas where they could work remotely. Those who lost their jobs left expensive cities. Some got serious about homeownership and finally bought a property of their own.

According to one survey from Zillow, nearly 2 million renters who weren’t able to afford homes in metro areas decided to buy homes farther away since they didn’t have to commute to work anymore.

These factors drove the housing market into overdrive, putting a lot of pressure on buyers and helping sellers obtain premium prices during fast sales.

Now, things have changed. Due to rising interest rates and a shifting economy, home sales have slowed. In Maryland, home prices were up 3.1% year-over-year in August 2022, but the number of sold homes dropped 22.6% and the number of homes for sale decreased 19.5%, according to Redfin.

Additionally, data from the Southern Maryland Association of Realtors® reveals that home values have made slower increases as buyer activity wanes. In the Southern Maryland region, 562 units were sold, which is a 31.55% drop compared to September 2021.

This is quite a change from buyers who purchased earlier on in the pandemic. According to a study from Clever Real Estate, 31% of buyers paid over the asking price when they purchased a home.

It’s clear that we aren’t in 2020 anymore, and we have to respond accordingly to the shift.

Here are some reasons why buyers are more hesitant these days, as well as what you can do in response to the slowdown if you’re preparing to put your house on the market.

The average rate for a 30-year mortgage is now 6.12%, which is a 14-year high. Even while home prices decrease, buyers are hesitant to sign on the line for a mortgage with a 6.12% interest rate because the resulting monthly payments are too high.

This past summer, inflation hit people hard. According to the Bureau of Labor Statistics, inflation was at 8.5% in July. “I think inflation is certainly alive and well,” ​​Sung Won Sohn, an economics professor at Loyola Marymount University, as well as president of SS Economics, told CNN.

Higher prices at the grocery store, the gas station, and everywhere else mean less money in people's wallets. Paychecks aren't going as far these days, which means people are hesitant to make large purchases. In some cases, inflation coupled with other factors means they simply can't afford to.

Though purchasing a home during the pandemic may have seemed like a good idea, many homebuyers ended up regretting it. How many? According to a recent study, a whopping 72%. Word of mouth is one of the most powerful forces in real estate, and if many homeowners regret buying a house because of the strain it's added to their lives, that sentiment has surely spread to others.

If the market has you nervous but you still want to sell your home, there are ways you can respond to the changes and have a better chance of getting the asking price you’re seeking.

First, get an experienced real estate agent on your side. You'll get expert information about what's selling, how to market your home, and the best time to sell in your area. In the winter in Maryland, the housing market slows down. It’s typically an ideal time for buyers, but not for sellers. Your agent may advise you to list your house once the weather gets warmer, like in spring, when people are also purchasing homes using their tax refunds. Even if you want to move right away, it could help to be patient until the weather is better and, hopefully, mortgage rates drop and inflation slows.

You’ll also want to make sure you know what it takes to entice buyers—especially when there’s more seller competition. You’ll need professional photos, high-quality staging, and multiple marketing avenues. Plus, nothing sells real estate like word of mouth and solid connections—so you’ll need those too.

Seem overwhelming? We’ve got your back. The Speicher Group of Long & Foster has a database of over 50,000 buyers plus the marketing skills to make your home sale fly. After we make sure your home is in top shape and thoroughly prepared for sale, we’ll actively promote through all our channels and make sure it gets in front of the right buyer at the right time. Find out more on our Seller Services page.

Your real estate agent can also assist you with:

You can also get a pre-sale home inspection to make sure that you’ll pass your buyer’s inspection. It’ll be an easier sell if there are minimal or no repairs required.

At the Speicher Group of Long & Foster, we have decades of experience selling homes for our clients in Bethesda and throughout Maryland. When you contact us, you’ll get matched with the right agent for you. Since we work as a close-knit team, you’ll have access to all of our knowledgeable agents and receive quick replies to your most urgent needs. At Speicher Group, you can conquer your impossible.

Want to get started selling your home? Then contact us online or call us today at 301-710-9920 to get started.

When you're ready to sell your home, we're here. Schedule a call with us today to find out how we can help you sell or buy your new home in Bethesda.