Salisbury MD Area Home Sales in 2022

There were 1258 home sales in Wicomico County in 2022, down 19% from 2021. The median sales price was $250,000, up 14% over the same period.* After a record-shattering 2021, the total for homes sold in the county came in as the fourth highest in history. Area home prices set an all-time record, however.

The average time on market for properties sold in the Salisbury MD real estate market last year was 1.1 months.

Foreclosures and short-sale properties accounted for 3% of residential sales in 2022, unchanged from 2021. The median sales price of a home in Wicomico County has gone up 80% since 2014.

Salisbury MD Area Home Buyers in 2022

As mortgage rates rose throughout 2022, active buyers in the Wicomico County real estate market facing low inventory and record prices faced a new challenge. The affordability crunch quickly led to declining home sales in all four quarters. Many homeowners that were thinking of selling (but didn’t have to) stayed put instead of trading in a 3% mortgage for another at 6% plus.

This is the primary reason why prices stayed elevated while home sales fell as there were still more buyers than sellers, even after mortgage rates effectively doubled. Home prices finally dropped in December after going up every month since August of 2020 on a yearly basis.

Salisbury MD Area Home Sellers in 2022

Since the economy re-opened in the summer of 2020, Wicomico County home sellers have enjoyed the best housing market in history. Sub 3% mortgage rates, working from home going mainstream and an influx of new residents from states with higher taxes and tighter COVID restrictions fueled an insatiable demand for housing on Delmarva for 18 months. Millennials are now the largest generation in U.S. history. Their need for housing also contributed to the perfect storm that was the Salisbury MD area real estate market from mid-2020 to the end of 2021.

During this time, appraisal waivers, appraisal gap addendums, inspection waivers, escalation clauses, and multiple offers were common. Aggressive action by the Federal Reserve to rein in inflation changed everything beginning in early 2022. Mortgage rates spiked and priced many buyers out of the market. Throughout last year, home sales fell precipitously while prices rose as outlined above.

What Can the Wicomico County Housing Market Expect in 2023?

At this time last year, we projected home prices to increase slightly (5%) and home sales to decline (2%). Both metrics were underestimated considerably. Long-term prognostications are an educated guess at best. The extent of the turmoil seen in the domestic residential real estate market last year was unexpected by many of the most respected and experienced authorities on the subject.

For 2023, we believe home prices in the Salisbury MD area will fall around 3% and home sales approximately 7% as the market “normalizes” to something similar to 2019. The factors we’ll be watching include-

• Inflation and Fed Chair Jay Powell’s Response

Recent comments by the Fed suggest their raising of the short-term Federal Funds Rate may be coming to an end soon. If so, mortgage rates likely peaked last year and could be back in 4% range by Q4.

• The Possibility of a Recession

Many economists believe a mild recession is likely in 2023, specifically in Q3 and Q4.

• Unemployment

Should the GDP contract, layoffs are a near certainty. A tighter labor market would mean slower wage gains and in turn, affect the housing market.

• The New GOP House Majority

Historically, economic growth is more likely with divided government at the Federal level. Some hard choices will need to be made with the upcoming debt ceiling fight in Congress and subsequent budget measures, assuming one is passed and not a series of “omnibus” bills.