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Luke Myers

How Local Real Estate Markets Closed out 2016

With 2016 in the books we closed out another chapter in real estate history.  The main factor driving real estate in 2016 was record low interest rates.  This past year 30 year Fixed mortgage rates (30 YR FMR) saw a low of a minuscule 3.34%.  People who bought homes this fall (2016) are patting them selves on the back.  Rates increased after the 2016 election as did the number of new loan applications, indicating there will be an increased number of buyers in the market in the coming months.

Looking at the major markets in the Maryland and Washington DC metro area 2016 versus 2015 shows and overall boom in prices and total volume (figure 1.)

2016-stats chart-2
Figure 1.

Prince Georges County and Baltimore City showed the highest increases in both Sold Dollar Volume and Average Sold Prices.  Total sold dollar volume was up over 10% in Howard, Baltimore and Anne Arundel Counties.  Washington DC and Montgomery county posted more modest gains.

Another significant story in the metro area was reported by MRISand this trend is also mirrored throughout the country, home prices are now reaching levels last seen during 2007 before the dreaded crash.  In the coming year it could mean that many homeowners who are still underwater may be able to put their houses on the market and walk away with cash.  This could relieve the inventory shortage the market has been facing.  Below is an updated meter showing months of supply for the region.

To understand how this meter works is fairly simple.  Everyone knows there are 2 types of markets a Buyer’s market and a Seller’s Market.  We realtors try to make it sound really complicated, in fact it’s best described by using this simple meter which takes into account the past 5 years of real estate statistics.  When the needle is on the left it’s a seller’s market because inventory is low, when it’s on the right it’s a buyer’s market because inventory is high.  That’s the most strait forward way to look at it.  If you were wondering what the market in your neighborhood is like right now just contact me and I’ll get you the info you need.

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