Home shoppers are paying more for fewer choices as new listings slow to a trickle

The Mid-Atlantic housing market seems to have missed the message that higher mortgage rates should stifle demand as buyers scramble to compete for a shrinking pool of listings. The number of available homes for sale in the Mid-Atlantic region has fallen to historic lows and home prices are once again at record highs, according to the Bright MLS Mid-Atlantic June Housing Report released today. Sales continue to trail last year, however, it’s not for lack of buyer interest.
“The housing market in the six-state Mid-Atlantic region continues to defy expectations,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “Strong buyer demand continues to push home prices to new records, while the absence of sellers is becoming even more apparent as new listings slowed to a trickle in June.” 

At $408,000, the median home price in the Mid-Atlantic is 2.3% higher than a year ago, hitting a record high. Prices rose in most local markets and for all housing types. Condos, often the most affordable options for buyers, led the price growth in June, up 3.7% compared to a year ago.  Homes are selling quickly, with half of all homes going under contract in a week or less. 

Buyers had been hopeful for more options during the spring as supply began to increase. But any relief buyers saw from an uptick in inventory evaporated in June. With no incentive for homeowners locked into low mortgage rates to sell, new listing activity is being driven primarily by sales of necessity—and it is far from enough to meet demand. The number of active listings in June was down 11.4%  compared to June 2022 and is 44.3% of the level in 2019. 

A lack of inventory is the primary constraint on the Mid-Atlantic housing market. New pending sales declined 17% and closed sales were down 17.6% year-over-year across the region in June. The lack of inventory also is impacting showings, which were down nearly 16% from a year ago. 

One market that offers more choices for buyers, particularly second home buyers, is the Del/Mar Coastal region, where the number of active listings was up 19% in June.  Prices are still rising, but beach properties are more plentiful than they were a year ago. 

“Buying a beach property during the pandemic made more sense for some families since they were not otherwise able to travel and could work and learn remotely for weeks or even months at a time,” said Sturtevant. “Now, that lifestyle isn’t possible for most people. It’s back to just a week or two of vacation during the year.”