Home sales in the second quarter of 2017 increased by almost 12 percent in the Southern Maryland region, according to the Southern Maryland Association of REALTORS® (SMAR). Both average and median prices rose significantly by 5.6 and 7.2 percent respectively as compared to the same time in 2016. In addition, pending sales or homes under contract but not settled also grew by 5.8 percent.
“The second quarter statistics demonstrate that we have a stable yet growing residential sales market in Southern Maryland,” said SMAR President Lisa Van Tassel. “Both average and median prices saw significant increases and pending units kept pace as well.” she added. Van Tassel went on to note, “We remain optimistic that this trend continues through the summer.”
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 2nd 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. In April and May there was a surge in home sales with 15.8 and 22.0 percent respectively. By June, there was a slight increase of one percent from the same time last year. The second quarter ended with an 11.9 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. Despite the fluctuations in past quarters, the second quarter saw solid growth in average prices. In April there was an increase of 3.8 percent followed by a rise of 5.5 and 7.5 percent in May and June respectively. Overall, there was an upturn in average price of 5.6 percent in the first 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. Median prices were slightly higher than average prices for this quarter but generally mirrored the improved trend of the upturn in price. In the Southern Maryland area during the second 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 5.8 percent in this quarter. May was the most active month with a jump of 10.5 percent as compared to the same time in 2016. Without a doubt, there is a trend of more homes under contract. It certainly signals an increase in activity in the home sales market and a higher level of engagement from the year before.
Active inventory represents the number of homes that are currently on the market. The number of homes on the market for the second quarter of 2016 was 785, which declined by 18.2 percent to 642 homes during the second 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 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 second quarter of 2016 months of inventory in Southern Maryland was 4.7 months. By the second quarter 2017 months of inventory stood at 3.4 months---which is below the ideal but still an indicator of a robust market.