Ready, Set, Buy! Some Mid-Atlantic Buyers Need to Pick Up the Pace

Buyers may still need to make quick decisions in 2023. While the market continues to shift, depending on your geography and price point, it is a competitive environment — and there’s data to help them understand why.

The Backdrop

Demand for residential real estate declined as interest rates climbed in 2022. The combination of elevated prices and costlier mortgages left many with no choice but to pause or discontinue their home search. Potential buyers still in the market breathed a sigh of relief as competition lessened.

It’s clear that buyers have gained some power. Waiving contingencies and forgoing inspections isn’t a necessity to secure a home. On the other hand, the supply of homes remains restricted. In the Mid-Atlantic region, the total active listings reported for February 2023 was 26,311, roughly 55% of the amount available in February 2020 before explosive demand took its toll.

What does the latest data say?

We can consider competition through various metrics. One approach would be to look at the trend in Median Days on Market. In January, the median for closed sales was 22 days, meaning half of the homes went under contract in 22 days or fewer, and half took longer. In February, the median was similar, at 21 days.

The median days for the week ending March 26 was 11 days. The trend from the past several weeks and the monthly statistics show that the time on the market is higher than it was last year but lower than it was in 2019, which represents typical activity.

Two to three weeks on the market isn’t long when you think from a buyer’s perspective. A prudent consumer will want to research online, tour some properties, and digest the information to make the best decision.

And some homes are selling more quickly!

Bright MLS listings data was used to determine the percentage of closed sales that went under contract in a week or less. Let’s analyze how closed sales in January and February 2023 compared to their counterparts last year and in 2019.

The percentage of homes going under contract in less than a week in January and February 2023 (represented by the orange dot) is unsurprisingly lower than what buyers experienced in 2022, when interest rates ranged between 3 and 4 percent. In all areas except Washington, D.C., the beginning of 2023 appears to be more competitive than 2019.

For the Mid-Atlantic region, three in 10 closed sales (29%) were under contract in less than a week. The percentage was 45% in 2022 and 20% in 2019.

Explore the trend for your region using the chart below.
 
 

 
 
The Takeaway

While we’re not in 2022 anymore, it doesn’t mean buyers have it easy. The number of active homes on the market is limited, and some sell fast or receive multiple offers. The market continues to be competitive, and buyers in 2023 should prepare accordingly.

Boost Your Market Knowledge

Stay informed about housing market conditions with Bright’s housing market reports and get a preview of future buyer activity by tracking the Bright MLS T3 Home Demand Index for the Philadelphia, Baltimore, and Washington, D.C., regions.

 

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Erica Plemmons serves Bright MLS as a Senior Economist. She delivers digestible market insights in the form of charts, blogs, and presentations from Bright’s comprehensive array of real estate data. In 2022, Bright’s over 100,000 subscribers facilitated $121B in real estate transactions through its system stretching across 6 states and the District of Columbia.