May Real Estate Market Update: Insights and Trends for Buyers and Sellers
Insights from Michael Severns
As we delve into the spring real estate market, several pivotal trends are emerging that both buyers and sellers should be aware of to navigate these dynamic times successfully. From shifting mortgage rates to the broader economic landscape, understanding these nuances can make all the difference in your real estate journey.
Mortgage Rates and Market Dynamics
This May has brought some relief with average mortgage rates falling by 0.7% last week, signaling a potential opening for buyers looking to enter the market or for homeowners considering refinancing. Despite this drop, the overall economic scenario remains challenging. The Federal Reserve's recent decision to hold rates steady implies that significant changes in mortgage rates are unlikely in the near future. However, this stability also presents opportunities, as new listings have surged by 15% compared to last year, and homes continue to sell relatively quickly.
For sellers, the key to capitalizing on this market is competitive pricing. With home prices up 5% from the previous year due to relatively low inventory and sustained buyer interest, strategically pricing your home from the outset can attract attention and potentially lead to multiple offers. The initial listing period is crucial for generating excitement among prospective buyers.
Economic Factors and Housing Trends
The economy's performance in April was underwhelming, with inflation slightly easing but still impacting sectors like housing. Shelter costs, for instance, rose by 5.5%, underscoring the persistent pressure on the housing market. Retail sales remained flat, reflecting cautious consumer behavior amidst economic uncertainties. This backdrop influences the housing market, where despite an increase in inventory, showing activity has faltered, with an 11.4% decrease in showings year-over-year, except in specific areas like Del/Mar Coastal and the Maryland Eastern Shore, which benefited from significant inventory boosts.
Builder confidence has taken a hit due to higher mortgage rates, affecting new constructions and developments. However, housing completions surged by 10.4% in April, indicating that completed projects are moving to market faster than new starts, which only rose by 5.7%.
Strategies for Buyers in Today’s Market
For buyers, the current market requires a proactive and prepared approach. While inventory remains historically low, new homes are entering the market daily. Setting up alerts for new listings and considering relisted properties can uncover opportunities that others might overlook. Being fully pre-approved and considering rate locks can protect you from future rate hikes and other rising costs like insurance and property taxes.
Conclusion and Invitation to Learn More
As your real estate expert, I am here to guide you through these unique times, offering insights and strategies tailored to your needs. Whether you are buying or selling, preparation and informed decision-making are key to success.
For more in-depth analysis and expert advice, don’t miss the latest episode of the Hungry Realtor Podcast, where we explore these topics and more to help you navigate the market effectively. Listen now and join the conversation: Season 2, Episode 1 - Jim Smith.
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Median list price soars to a new high. The median list price for the week ending May 19 was $449,000 in the Bright MLS service area, a 5.9% increase from last week and 12.5% higher than the same week in 2023. The median list price this week marks a new record high for the region.
Inventory continues to increase. There were 31,331 active listings in the Bright MLS service area this week. Inventory is 3.9% higher than last year, with the largest year-over-year increase in 2024. While still low by historical standards, supply continues to show signs of recovering.
New listings remain flat. There were 3,380 new listings this week, which is relatively flat compared to a week ago. New listing activity remains slightly above last year’s level, up by 1.5%. The increase in inventory this week, therefore, was driven mostly by a pullback in new contract activity, rather than a surge in new listings.
There's always something happening in the world of real estate, and I'm here to guide you through it. For deeper insights, use the icons above to tune in to the Hungry Realtor Podcast (Season 2 Coming Soon!), and let's navigate these fascinating times together.
Keywords: seller's market, home buyers, real estate strategies, competitive offers, 2024 housing market, home buying tips, real estate trends, mortgage pre-approval, bidding wars, negotiation tactics, real estate agents.
