State of the Salisbury MD Area Real Estate Market
As of June 30, there were 515 settlements on residential housing units in Wicomico County in 2016, up 6% from this time last year. The median sales price was $145,000, up 4% over same period along with a 13% decrease in inventory. Foreclosures and short sales have accounted for 32% of residential sales in the Salisbury Maryland area this year.*
The Wicomico County real estate market continued to pick up momentum as we reached the halfway point of 2016 and is right on track with the forecast given in the 2015 Year in Review. The market has seen eight consecutive quarters of year over year sales growth, price appreciation, or both.
There were two statistics that jumped out while doing our research. The first is the overall downward trend in inventory, which currently stands at around 4 months of supply, a figure not seen in a decade. This is the result of strong buyer demand from a slowly improving employment scenario on the Lower Shore, coupled with near record low mortgage rates.
The second statistic of note is sales of distressed properties as a percentage of home sales in Wicomico County have dropped significantly from the first quarter to the second quarter of this year. Fewer homeowners are under water in their equity position, resulting in fewer short sales and foreclosures. This along with higher buyer demand are the primary factors in the recent upward pressure on home prices.
Housing Outlook in Salisbury MD for the Second Half of 2016
We will be watching three key components of the Salisbury Maryland area real estate market for the remainder on 2016- low inventory, November’s general election and mortgage interest rates.
With less than 500 residential units currently for sale in Wicomico County, we don’t recall seeing inventory this low since beginning to document this statistic some 8 years ago. While strong buyer activity in the second quarter is credited with current inventory levels, Salisbury MD area homeowners have not put enough new listings up for sale to keep us around 6 months of supply, a figured attributed to a “balanced” market. A lack of homes on the market now will by default impact sales later this year.
We believe the November election looming in the middle of the fourth quarter will put many would be sellers (and some buyers) in the Salisbury MD area in a “wait and see” mood until after the election, and many of those will go on to wait until next spring rather than list just before the holidays. This is a pattern that is typically repeated every four years, both locally and nationwide.
Interest rates on mortgages should stay low through the remainder of the year. Short term, the Brexit fallout has been the dominant factor in the recent dip in rates that were already near historic lows. Economic reports will trickle in soon for the second quarter and will impact upcoming Fed statements and action (or more likely, inaction). In an environment where many Central Banks are going to negative interest rates (where depositors pay their banks to hold their money!), it’s hardly likely that the Fed will raise it’s funds rate, at least any time soon and something we pointed out six months ago.
When taking the totality of these these three scenarios in account, we expect the momentum from the second quarter to carry over into the next two to three months, then stabilize before election season and scale back toward year’s end in its typical seasonal pattern. If our prognostication is correct, we’ll see roughly 480 residential housing units sold in Wicomico County during the second half of 2016.
We love to hear from our readers, so questions, comments and suggestions are always welcome!
*Based on information from the Coastal Association of Realtors® for the period 1/1/16 through 6/30/16
Information compiled by Esham Real Estate Inc. is deemed to be reliable, but is not guaranteed © 2016 MLS and FBS