Salisbury MD Real Estate Q1 2023 Sales Report

Q1 2023 Housing Statistics                 

For the period of January 1 through March 31 in the Salisbury MD area real estate market, there were 214 settlements on single-family housing units, down 24% from this time last year. The median sales price was$241,000, up 3% over the same period.

Foreclosure and short-sale properties accounted for 3% of single-family home sales in the first quarter of 2023. This was up from 1% during the same period in 2022. *

Takeaways for Salisbury MD Area Home Buyers

There are two drivers for the significant decrease in home sales in the Salisbury MD area. First, around this time last year, Jay Powell and the Federal Reserve began raising its short-term rates. Since then, the Fed has done so an additional eight times. The Fed Funds Rate indirectly affects mortgage rates for homes. That said, in the last twelve months rates on home loans have more than doubled. This has drastically decreased the purchasing power of many would-be home buyers and put them on the sidelines.

Secondly, many homeowners who would sell in a more “normal” market are hesitant to trade the 3% loan they have locked in for one closer to 6%. The result of these two factors is not only lower demand but also lower supply. This is why home prices have not dropped in Wicomico County as the supply/demand balance has not shifted appreciably. Should mortgage rates drop into the 5% range by mid-year as many economists expect, more home buyers will get back into the market. Such a scenario would put upward pressure on home prices. In March alone, home prices were up 12% on a yearly basis.

Takeaways for Salisbury MD Area Home Sellers

Wicomico County home buyers are more “rate sensitive” than ever, especially when dealing with record-high home prices. Home sellers in the Salisbury MD area would be wise to recognize this and price their homes accordingly. Multiple offers for properties are certainly making a comeback, but the local real estate market is not 2021 all over again in our opinion. The fundamentals are simply not the same. In fact, Q1 of 2023 produced the lowest home sales for the first quarter in seven years with the exception of Q1 of 2019.

What Lies Ahead for the Wicomico County Real Estate Market?

The full impact of the combination of tight home inventory in Wicomico County and much higher interest rates is becoming fully evident. Our Q1 home sales projection came in significantly lower than expected as a result. For Q2 of 2023, home sales should rebound a bit to the tune of around 250 units closed by the end of June. We also expect prices to remain stable with the possibility of single-digit gains on a yearly basis. A softening labor market and Federal Reserve announcements will be factors in shaping the local housing market for the middle of the year.

*Based on information from the Coastal Association of Realtors^® for the period 1/1/23 through 3/31/23

Information compiled by Vision Realty Group is deemed to be reliable but is not guaranteed. © BRIGHT MLS Copyright 2023