While there have been some fluctuations in home sales, home prices continue to rise in the third quarter in the Southern Maryland region, according to the Southern Maryland Association of REALTORS® (SMAR). Both average and median prices rose significantly by 8.8 and 8.5 percent respectively as compared to the same time in 2016. Despite a dip of 4.4 percent in August, home sales grew by 3.9 percent during the third quarter.
“We are pleased with the pace of the residential sales market as demonstrated by the third quarter statistics in Southern Maryland,” said 2017 SMAR President Lisa Van Tassel. “While pending units have slowed a bit, the difference was a drop of less than one percent,” she added. Van Tassel went on to note, “the ongoing price appreciation and overall market activity remains robust.”
Monthly housing statistics for Southern Maryland are compiled by data as reported by MRIS. For the purposes of this report, “units” are defined as the closed sales and “pending units” are properties under contract. Months of inventory are based on the current active inventory and monthly sales for the corresponding month.
The Southern Maryland Association of REALTORS®, is an affiliate of the Maryland REALTORS® and National Association of REALTORS®. We are proud to serve our members and our community and work to ensure professionalism in the industry. Our volunteers and staff work to offer services to real estate professionals and to provide avenues for our members to become more successful. We proudly work to promote and protect home ownership and private property rights.
2017 Southern Maryland 3rd Quarter Local Market Data
The number of homes sold are those that have sold and gone through settlement---in effect the transfer of ownership has taken place. There has been a trend since the summer of 2015 of increased sales across the state and more specifically in the Southern Maryland region. Despite the fact that there was a 4.5 percent dip in August, there were increases of 6.8 and 11.4 percent in July and September. The third quarter ended with a 3.9 percent rise in home sales from the same quarter in 2016. The growth in activity is a sign of a healthy market and reflects the fact that listed prices are in line with the market.
While the market has reached equilibrium with the number of units sold, the market in Southern Maryland continues to see adjustment in terms of average price. In the third quarter, every month registered increases in average prices from 5.2 to 14.2 percent. Overall, there was a solid rise in average price of 8.8 percent in the third quarter of 2017 as compared to the same quarter in 2016.
Because the median price is the number that is in the middle of all values, it can be greatly impacted by wild fluctuations in prices overall especially in counties with small numbers of units sold. The data for median prices closely mirrors the numbers for average prices. All three months in the quarter posted increases in median prices from 4.8 to 15.2 percent. In the Southern Maryland area during the third quarter, the simple average increased overall by 7.2 percent between 2016 and 2017.
Pending units are defined as homes under contract but have not yet achieved settlement. In comparing the average for 2017 versus the same time in 2016, there has been an increase of 0.8 percent in the third quarter. July was the most active month with a rise of 5.1 percent followed by August with an uptick of 1.9 percent. By September, the number of pending units fell by 5.4 percent.
Active inventory represents the number of homes that are currently on the market. The number of homes on the market for the third quarter of 2016 was 771, which declined by 15.8 percent to 649 homes during the third quarter of 2017. For counties with a significant backlog of inventory, this decrease is a good sign. It means that buyers are clearly engaged in the market and this is further confirmed by the steadily growing number of homes sold in the second quarter of 2017. However, if active inventory drops too low it will impact consumer choice and may make buying a home difficult.
Months of Inventory
Months of inventory is another way to measure the well-being of a local market and is closely tied to active inventory. Overall, six months of inventory is generally considered to be the gold standard for a healthy real estate market. During the third quarter of 2016 months of inventory in Southern Maryland was 4.5 months. By the third quarter 2017 months of inventory stood at 3.6 months---which is below the ideal but still an indicator of a robust market.