This is your monthly real estate market update for Anne Arundel County Maryland with James Bowerman and the Real Creative Group of Douglas Realty.
Anne Arundel County, MD Housing Inventory
Let’s take a quick dive into a few of the metrics for Anne Arundel Counties housing inventory.
We have 200 homes currently, coming soon. That means in the next 21 days or so, these properties will be active on the market. You can tour and make offers on these homes. This is slightly down from last month. In June 2021, we had 233 homes coming soon. So not what we would like to see, but they're coming on. So hang tight, everybody.
798 properties are currently active for sale on the market. This is up slightly since last month (was 714 active listings). However, this is down 33% compared to the 1,192 active homes this time last year.
1,812 homes are under contract and no longer available to tour or purchase. That’s 154 fewer homes compared to last month (an 8% decrease). Looking at June 2020, we’ve experienced a 13% decrease.
Last month we had 1,284 homes sold. 15% more homes sold compared to the previous month of May. And it’s a 26% increase over the 1019 homes sold this time last year. That's an interesting point: we have fewer homes for sale, but we're selling more of them.
Months of Inventory
We currently have less than one month of inventory, meaning if no new listings came on the market, it would take less than a month for the remaining properties to sell.
Anne Arundel County, MD Average Time on Market
The average days on market for the 1,284 sold properties in June 2021 for Anne Arundel County went down to 12 days, while the median remained at only 5 days. Homes are still selling very fast, so if you see something you like we advise moving quickly!
Anne Arundel County, MD Average Home Prices
The average sold price in June broke the half-million-dollar mark at $502,050 and sold on average for 1.8% over the list price. This means homes in Anne Arundel County are selling for 14% more than they were this time last year when they averaged $440,365.
Big Selling Challenge
The average home price increase is great news for people who are in a position to sell. Of course, that leads to the question “Where do we go?” If that’s the question on your mind, reach out to us here at the Real Creative Group, because we’d love to tell you your options.
Impact of Covid-19 on Real Estate: 3-Year Analysis
This market may have you thinking of a group of small children with a bubble machine, but looks can be deceiving. There certainly are some changes when compared to years past, but we don’t think the straits are as dire as they’ve been made out to be. To prove it, we took a look at the spring metrics for 2019-2021 to get the real story.
New Listings in Anne Arundel County 2019-2021
In March 2019 we had 1,391 homes listed in Anne Arundel County. In March of 2020, at the very beginning of the COVID-shutdown, we saw a 12.8% decrease in new listings and a lot less home-showing traffic. In March 2021, new listing numbers still haven’t quite recovered when compared with pre-COVID stats. We saw another 2.6% decrease in home listings this March when compared with last year.
April is when we see the most significant differences. During April 2019 we had 1,433 new listings, but fast forward to April 2020 with the lockdown in full swing, we only had 866 new homes listed. That’s a 39.6% decrease. However, in April 2021, we had a huge rebound of 61.5%. There were 1,399 new listings in April this year, which nearly takes us back to pre-COVID levels.
In May 2019, there were 1,459 new homes listed in Anne Arundel County, but in May 2020 there were only 1,105. This past May, however, we rebounded back up to 1,367 new listings. So not quite at pre-COVID levels, but not as down as during the thick of the pandemic.
Closed Sales in Anne Arundel County 2019-2021
Closed sales is a bit of a different ball game when compared to new listings. In March 2019, 676 home sales closed. However, in March 2020 we saw that number increase by 26.9% to 858. Once a house is under contract, it can take 30-60 days before it closes.
At this time people really wanted to settle and get into their homes, especially with all of the uncertainty introduced into our world with COVID-19. In March 2021, 912 homes closed, even with fewer new listings being the trend when compared to pre-COVID stats.
We did see a 12.6% decrease from April 2019 to April 2020 but closed home sales went back up by 38.9% in April 2021. During May 2020, we saw an even steeper decrease of 25.5% when compared with May 2019. However, May 2021 showed new vigor in the market with a 56.6% increase in closed sales. That’s well over the number of homes sold in May 2019.
People have confidence now, and they’re coming to the table ready to make deals. Global supply chain issues are still affecting the real estate market here, but more people are getting the vaccines, restrictions are being relaxed, and we’re no longer in an election year.
Average Price Sold in Anne Arundel County
Currently, we can see that there’s an equity build-up and that’s why there are so many buyers. When we look at the average price sold, it’s been trending upwards, but especially in 2021. Looking at March 2019 and March 2020 there’s a steady increase of 12.3%. We see about the same increase comparing March 2020 and March 2021.
But, April and May show nearly duplicable patterns. There’s barely any increase in home prices when comparing 2019 and 2020. Then we compare both April and May for 2020 and 2021, and we see a large spike in home price. We’re now over the 500,000 dollar mark, and prices are expected to continue to appreciate.
How are so many people still able to buy in this market? The answer lies in the interest rates, which were incredibly responsive to the crisis. Back in March 2019, we were at about 4.27%, according to Freddie Mac. In March 2020, that had dropped to 3.45%, and this past March interest rates were at 3.08%. Those are significant decreases in actual interest rates and average interest rates.
It certainly explains why you may have heard about so many of your homeowner friends refinancing.
So to sum up interest rates, we were in the 4% range in 2019, in the 3% range in 2020, and in May 2021 we dropped to 2.96%. So many people want to buy a home right now because interest rates are so low. Even though home prices are going up, lower interest rates give the home buyer more buying power.
Low-interest rates greatly influence your potential monthly payment. We can see this through a comparison of interest rates for the same time frames (March, April, May of 2019-2021) using the average home price in Anne Arundel County. This doesn’t include taxes or insurance, of course, but should demonstrate the different environment homebuyers are in now.
In March of 2019 interest rates were about 4% and the average monthly payment was about $1,900 for a $400,000 home. If you purchased a home for $400,000 at the start of COVID-19, March 2020, then your payment would have been $1,785 each month. Finally, if you had purchased a $400,000 home this past March, then your monthly payment would’ve only been $1,700.
Now homes are also appreciating, so this isn’t to say that you would’ve been able to purchase the same home. But when we keep the home price static, it’s a lot easier to see how people can fit “more home,” i.e. a higher-priced home, in their budget when interest rates go down.
Once interest rates begin going back up, it’s very likely we’ll see less buyer competition in the market.
2021 Summer Projection
Around this time of year, we typically see a “summer slowdown.” We believe this will be doubly true as places continue to open up. People are feeling more confident taking a vacation, and that’s a huge driving factor in any summer slowdown.
However, there are two other factors at play: seller greed and buyer fatigue. With homes appreciating so quickly, many sellers are entering the market with crazy high listing prices. Some of these prices are definitely unrealistic, but they COULD succeed with so much buying competition and continued low inventory.
Buyers are tired though. They’ve spent months running out to view homes and putting in offers that are way above listing price to beat other competing offers. Homes are off the market within a week of being officially listed. Some buyers have put in multiple offers and still haven’t managed to get under contract with a seller. They’re feeling buyer fatigue.
For the buyers who can continue to stick it out though, there’s opportunity here. Where others are choosing to take the summer off, if you’re determined, you may be able to take advantage of less competition. We saw a slight uptick in inventory when compared with the previous month and it’s still an amazing time to sell.
Whether you’re buying or selling in this market, it pays to have an experienced realty team on your side. Reach out to us here at the Real Creative Group with any questions you have!