Real Estate Market Update September 8, 2022
Ryan Haley, broker and owner of Atlantic Shores Sotheby's International Realty, provides his insights about the real estate market in Worcester County for the week of September 8th, 2022.
What's Going on Locally in Our Real Estate Market?
When we look specifically at Worcester County and the real estate market here for the last seven days, we've seen a fairly balanced market. In fact, we saw 63 new listings come on the market in the last seven days, while at the same time, we had 55 of those listings go under contract. So, a few more listings that went under contract, but it’s still relatively balanced.
We are also seeing the best properties getting lots of attention, and in some cases, we're seeing multiple-offer situations.
In other cases, we're seeing some properties that maybe were listed earlier in the summer with a higher list price, and in some of those cases, we've seen a few price reductions. In fact, in the county, we've seen 27 price reductions in the last seven days.
However, this should not be interpreted as home price decline in general. It is actually list prices declining, values holding and actually increasing a little bit, but the people who may have come here in the beginning part of the summer, overshot the mark and now are making some adjustments in order to get to the level where the buyers are today and get their properties sold. Thus, it’s fairly balanced like as mentioned earlier.
When we look at the entire county inventory, we have currently 309 properties for sale. In the last 30 days, we've seen 167 of those properties go under contract. That's just under half of the total inventory that has gone under contract, and that gives us just less than a two-month supply of inventory today. That is up from when we saw in June when we were just around one month of supply. Once again, we saw some of those prices that were a little high and buyers that were not quite willing to go that level. Thus, some of that price reduction on a few more properties on the market.
What's Happening Nationally in the Real Estate Market?
One thing that should be pointed out is that nationally, we saw some predictions this week as to where mortgage rates could be going over the course of the next year.
Freddie Mac, Fannie Mae, the Mortgage Bankers Association, and National Association of Realtors have all released their projections for the next year.
As we enter the fourth quarter of 2022, the average prediction is that we'll be at 5.4 percent on a 30-year fixed mortgage. As we go into the first quarter of 2023, we're not seeing much change at all, just a possible reduction down to 5.3 percent.
The same holds true for Q2 of 2023, where they're predicting 5.2 percent. And then, we might actually see a little bit of a change as we enter Q3 of 2023, where they are projecting that we could be around 4.8 percent.
When we average all four of those industry experts as to their prediction on where we might be, fast forward to a year from today, possibly 5.4 percent. In a year, we could be at 4.8 percent.
Obviously, all of these are projections, and nobody's 100 percent sure exactly where we will be. But what you should know is that if you can find a property right now that checks all the boxes, then it is a good idea to go ahead and secure the property if it makes sense for you today.
It’s true that if you go with a 30-year fixed mortgage, your interest rate may be a little bit higher right now; but what we've seen is—and what we're predicting at some point—these interest rates may come down which would give you the opportunity to possibly refinance to a lower rate or you could opt for an ARM (adjustable rate mortgage) product today. This typically would give you a locked-in interest rate for anywhere up to seven to 10 years. At the end of the seven- to 10-year period, you would have an adjustable rate. That rate could adjust but there's also the chance that we'll most likely see interest rates decline over the course of the next seven to 10 years which would give you that opportunity to possibly refinance.
That is the real estate market update here for Worcester County for the week of September 7th, 2022. If you have any other questions related to real estate, whether locally in Maryland or Delaware, or in the country, in general, please don’t hesitate to give us a call, and we’ll be happy to answer these questions for you.