Median home prices decreased in many parts of suburban Maryland last month with the exception of Prince George’s County, which showed a 6 percent increase, according to the latest Long & Foster Real Estate Market Minute report. The number of homes sold decreased in all areas of the region, with Frederick County seeing the steepest decline at 28 percent followed by a 25 percent decrease in Charles County. Inventory also saw a decline in suburban Maryland, except for Montgomery County which had a 1 percent increase.
“Our January report reflects how hyperlocal the market is, in and around Washington, D.C.,” said Larry “Boomer” Foster, president of Long & Foster Real Estate. “While there were some surprising good reports out of Virginia in units sold, the numbers were down in double digits in the Maryland suburbs.”
Foster said while they knew the government shutdown would have an impact on sales, it’s likely that it wasn’t as large of an impact as anticipated.
“Another interesting anomaly for January was that inventory has started to slow in its contraction in a lot of places, and Montgomery County’s inventory was up by one percent compared to last year at this time,” said Foster.
The housing affordability index also improved recently, and Foster noted that while the index has typical seasonal fluctuations, there are three factors that influence those fluctuations.
“The three things looked at in the housing affordability index are mortgage rates, appreciation of homes, and people’s ability to pay – or wages,” Foster said. “When these things come together in the right way, it leads to more affordable housing, though that normally happens this time of year anyway.”
Although mortgage interest rates are expected to increase this year, industry experts lowered their predictions and they continue to remain down.
“I don’t expect that to be a trend moving forward,” Foster said. “We’ve avoided another government shutdown and investors are becoming more confident around U.S./China trade talks. We’ll see money shift out of Treasuries and into equities, which will cause the yield on the 10-year Treasury bond to go up within the next few weeks, unless something else happens in the world economy.”