Real Estate Market Update for 9/21/22 in Worcester and Sussex County
Ryan Haley, broker at Atlantic Shores Sotheby's International Realty, is back with the market report for September 21, 2022.
This is pretty much our halfway-through-the-month market report. We are into the fall market, and this week, Ryan discusses not just Worcester County which we've been talking about the last couple of weeks, but also Sussex County, Delaware. This is just to give you some perspective as to what's going on between the two months and the overall size difference between our two marketplaces.
Real Estate Market Update for Worcester County, Maryland
In the last seven days, we have seen 62 new listings come on the market between either coming soon and/or active for sale. At the same time, we put 70 properties under contract in the last seven days. So, the trend we saw last week continues on where we are selling more properties than are coming on the market.
At the same time, we saw 25 price reductions in the past seven days, down from about 37 last week. This is an indication that the market is picking up a little bit. There have been price reductions from some of those properties that needed to right-size themselves to get to the right level to attract interest, while at the same time, we've seen a little bit more demand here in the last seven days.
When we look at the total county, in general, we have 299 active properties for sale and in the last 30 days here, we put 197 under contract. That gives us 1.5 months of supply today, down from about 1.8 last week. So, inventory is getting gobbled up. This is not to say that we're not listing as many properties, but what we're seeing is a little little bit more demand and those properties are going under contract.
Real Estate Market Update for Sussex County, Delaware
Delaware is unique. There are only three counties in the entire state, and Sussex County is the coastal county all the way at the southern end. Essentially, it stretches from Milton at the North all the way down to the Maryland-Delaware line in Fenwick Island.
It's a large county, and it goes fairly west as well. It is unique in the aspect that there are a lot of agricultural activities, there's a lot of new construction, and there are very high-end beach properties. So, there is a lot going on in Sussex County, Delaware.
In the last seven days, we saw 151 new properties come on the market. At the same time, 174 have gone under contract—same trend that we're seeing in Worcester County where more properties are going under contract than are coming on the market as we get into the heart of the fall market.
Also, something very noticeable is the big number in terms of price reductions. We had 120 price reductions in the last seven days, so those sellers seem to be realizing that they want to take advantage of the fall market. They want to do everything they can to get their properties sold this fall. Thus, they are correcting and getting their prices to the levels where the buyers are willing to pay.
When we look at the county as a whole, this is a big number compared to what we see in Worcester County. But there are 1,296 active properties for sale, while at the same time in the last 30 days, we saw 480 properties go under contract. That translates to 2.7 months of supply. So, here we are in Worcester County with 1.5 months’ supply, while Sussex County is a little bit larger with 2.7 months’ supply
Real Estate Market Update Across the U.S.
Our national numbers, as you may recall from last week, we had 3.3 months of supply. The national number is continuing to increase, whereas at the beach we're really unique. We're putting a dent in our inventory. The demand right now is exceeding the available inventory.
Interest rates are definitely bouncing around. We've seen interest rates increase here and some numbers are upwards of seven percent on a second-home condo, while there are some banks that are offering options with ARMs (adjustable rate mortgages) and paying points to be able to get those mortgage rates down.
There’s a big Fed announcement coming up this week. We're going to most likely see a Fed increase in the federal funds rate. Many are predicting 75 basis points. Some outliers have mentioned even up to 100 basis points, so we'll see what goes on with that.
Nationally, there’s one interesting point worth discussing. Some people may say to you that we could see a bubble or that homeowners are in danger right now. But one of the biggest reasons why we are not going to see a bubble and we're not going to see a real estate crash is the amount of equity that homeowners have.
There is an interesting stat from the deputy chief economist from First American. They put this out this week, and this covers the entire country as a whole. It says that U.S households own 41 trillion in owner-occupied real estate, just over 12 trillion in debt, and the remaining 29 trillion is equity.
So, the national loan-to-value rate in Q2 of 2022 was 29.5%, the lowest since 1983. With that, homeowners had an average of $320,000 in inflation-adjusted equity in their homes in Q2 of 2022. That is an all-time high.
On average, when you factor in inflationary measures, homeowners have an average of $320,000 in equity in their homes across the United States—huge number there.
It just simply is not going to be an environment where even if things slow down or people started to lose jobs, people are just going to walk away from their homes. They're not going to do that. We're not going to see fire sales because there's so much equity in these homes. If people do get into a jam, they can simply sell them and still make money.