Maryland's real estate market has been making headlines with soaring home prices, low inventory, and record-high interest rates. As we approach 2024, what can home buyers and sellers expect in the Free State? Let's delve into the latest market trends and predictions.

Current Market Snapshot:

In September, Maryland witnessed a 4.6% year-over-year increase in the median home sale price, reaching $408,200. Despite interest rates hovering around 8.5%, the real estate landscape has been dynamic, with certain areas experiencing remarkable growth. For instance, homes in Bethesda saw a substantial 34.4% YoY increase, selling at a median price of $1,275,000.

Interestingly, there hasn't been a single market in Maryland where home prices declined YoY. However, the market dynamics are complex, driven by a delicate balance between high demand and low inventory.

For Home Buyers:

If you're in the market to buy, the current scenario presents both challenges and opportunities. The 8.5% interest rates are significant, and mortgage payments require careful consideration. While rates are unlikely to drop dramatically in the coming months, buying now can help you avoid potential bidding wars. Seller concessions may also be on the table.

For Home Sellers:

Sellers, on the other hand, are capitalizing on Maryland's high home prices. Homes listed on MLS sell faster and for approximately 17.5% more than off-MLS homes. The tight inventory has led to a staggering 43.3% of homes selling above the list price, indicating a strong seller's market.

2023 Challenges and Market Trends:

Despite the buoyant home prices, Maryland's housing market faced challenges in 2023. A sluggish market saw a 22% YoY decrease in home sales in September 2023, attributed in part to mortgage rates hitting a two-decade high of nearly 8%. The number of houses for sale in Maryland was 25,000, a 40% decrease from 2022.

The months of supply stand at 1 month, underscoring Maryland's status as a seller's market. However, the decrease in home sales could be attributed to a lack of available properties, emphasizing the need for more listings.

Predictions for 2024:

As we look ahead to 2024, several trends and predictions emerge:

• 1. Return of Home Sellers: Sellers who remained on the sidelines in 2023 are expected to return, driven by job changes or the desire to relocate. Additionally, baby boomers looking to downsize may contribute to up to 30 million housing units.

• 2. Stabilizing Mortgage Rates: While mortgage rates hit 7.79% in October 2023, a drop to 7.35% in November indicates potential stabilization. Rates are expected to remain above 6%, but the second half of 2024 may bring more stability.

• 3. Increased Home Buyers: The historically high interest rates deterred buyers in 2023. However, a drop to 7.35% in November saw a rise in mortgage demand, and the easing inflation and stabilizing rates could bring back house hunters.

• 4. Continued Rise in Home Prices: Maryland's home prices are predicted to continue their upward trajectory as long as the supply-demand dynamic remains unchanged.

• 5. New Home Construction: Housing permits for single-family homes are anticipated to rise by 5.5% in 2024, reflecting the high demand in Maryland.

• 6. iBuyer Challenges: iBuyers, struggling in 2023, may continue making lowball offers, affecting traditional home selling dynamics.

Bonus Prediction: Negotiable Buyer Broker Commissions!

Recent legal challenges may lead to negotiable buyer broker commissions, potentially changing the dynamics of real estate transactions.

Conclusion:

While Maryland's housing market faced challenges in 2023, the outlook for 2024 is optimistic. Sellers can capitalize on rising home prices, but they may face competition from new construction and strategic concessions from builders. Buyers, while navigating high-interest rates, may find opportunities for negotiation and concessions.

As Maryland's housing market evolves, staying informed and working with experienced real estate professionals will be crucial for both buyers and sellers.