State of the Salisbury MD Area Real Estate Market
As of June 30, there were 612 settlements on residential housing units in Wicomico County in 2017, up 19% from this time last year. The median sales price was $148,000, up 3% over same period along with a 26% decrease in inventory. Foreclosures and short sales have accounted for 21% of residential sales in the Salisbury Maryland area this year.*
As we reached the halfway point of 2017, the Salisbury MD area real estate market demonstrated its momentum and tracked closely to our expectations posted early in the year. The Wicomico County housing market has now enjoyed 10 consecutive quarters of year over year sales growth, price appreciation, or both.
The most encouraging statistic in our research was the dramatic drop in the percentage of distressed property sales, down 34% from the first two quarters of last year. As the economy improves and home prices increase, fewer property owners are in a negative equity position resulting in fewer short sales and foreclosures.
Also of note is the very low home inventory in the Salisbury MD area, down to 3 months of supply in June. This remains a concern to buyers as many are losing out on homes to other buyers by not moving quickly enough. Multiple offers on well-priced, desirable homes are now commonplace. This is obviously a boon to sellers in the Wicomico County real estate market.
Housing Outlook in Salisbury MD for the Second Half of 2017
We are expecting more of the same for the Salisbury MD area real estate market in the second half of 2017- strong buyer demand, tight inventory and low mortgage rates. On the latter point, the Federal Reserve will meet four more times in 2017 and discussion of raising the Fed Funds Rate will certainly be in the mix. While this does not directly correlate to mortgage rates, the Fed’s plan to gradually unwind its 4.5T balance sheet accumulated during the Great Recession would impact the stock markets and certainly affect mortgage rates.
As the Fed’s “juicing” of Wall Street reverses, this could actually push the indexes down and encourage investors towards bonds which fund the mortgage pool and possibly keep rates stable and even drive them down. While nobody has a crystal ball, this scenario would encourage additional home buyers to enter the market sooner to take advantage of favorable mortgage rates and add fuel to an already very warm local housing market. This theory flies in the face of “conventional” wisdom, but it’s one worth keeping an eye on.
Other factors shaping the national economy (and the local housing market) in the next six months are congressional action (or inaction) to repeal the so-called Affordable Care Act and President Trump’s plan for tax reform. By simply reducing the corporate tax rate to the proposed 15%, trillions of dollars would repatriate back to the U.S. and put the economy on a trajectory not seen in three decades.
Check back in with us in early August for the July Sales Report as it will be interesting to see if the Wicomico County housing market produces three consecutive months with 100 plus single family homes sales. This would be something not seen in quite a long time!
*Based on information from the Coastal Association of Realtors® for the period 1/1/17 through 6/30/17
Information compiled by Esham Real Estate Inc. is deemed to be reliable, but is not guaranteed © 2017 MLS and FBS