Homebuying returns to ‘crazy’ pace

Somerset County lacks inventory as average sale price rises; more buyers than listings

Crisfield-Somerset County Times
Posted 5/31/21

PRINCESS ANNE — COVID-19 may have held back down some parts of the economy but real estate last year started “very hot” and is now at the point where it’s “very …

You must be a member to read this story.

Join our family of readers for as little as $5 per month and support local, unbiased journalism.


Already a member? Log in to continue.   Otherwise, follow the link below to join.

Please log in to continue

Log in

Homebuying returns to ‘crazy’ pace

Somerset County lacks inventory as average sale price rises; more buyers than listings

Posted

PRINCESS ANNE — COVID-19 may have held back down some parts of the economy but real estate last year started “very hot” and is now at the point where it’s “very crazy.”

According to Coastal Association of Realtors President Joni Williamson, a low inventory of available properties combined with rising demand and historically low interest rates are resulting in some sellers seeing multiple offers.

“Once the stay at home orders began the real estate market came to a halt for a couple of months,” she said. Existing transactions were allowed to finish as agents got creative with virtual showings and remote contract signings.

Over time fear subsided about unemployment and a slowing economy and real estate picked up as people returned to some sense of normalcy. “Things got crazy again around May and June of last year,” Ms. Williamson said. People were able to qualify for mortgages, and now “there are more buyers than listings.”

That combination is resulting in rising prices but with continued low interest rates buyers are finding they can purchase “more home for less money than ever before.”

In Somerset County home sales had been rising over the last three years with nearly 275 changing hands in 2019. That fell in 2020 by around 50 but the dollar volume last year at nearly $37.9 million was just 3.2% less than 2019. Meanwhile the average sale price in 2020 was $157,282 or 8.1% higher than 2019.

In 2021 the problem is inventory. “It’s our biggest struggle,” Ms. Williamson said, as there are more buyers than homes to sell. Except in Princess Anne where there are over 40 units under construction elsewhere across the county few houses are going up to satisfy demand.

“We are at the lowest inventory number since 2015 and even before that,” Ms. Williamson said. “Almost every well-priced listing that we see has a multiple offers...eight, ten, even more on some listings which is leaving a lot of buyers out in the cold.”

Properties that were on the market on average more than 130 days were at 95 days in 2021 and through February of this year at just 53 days.

Urban buyers are looking at Delmarva “because they don’t want to be stuck in the city” and are coming here to enjoy rural living, Ms. Williamson said. “Well priced homes are selling very quickly.”

There are also those who found they can work from home thanks to the changes brought about by the pandemic. Colin Zimmerman, government affairs director for the Coastal Association, said remote workers are moving to where there’s a higher quality of living — as long as there is access to broadband.
“They’re choosing now to move, but if you don’t have the inventory (or infrastructure) available,” they’ll find someplace else, he said.

Ms. Williamson said the current homebuying craze differs from 2008 because many buyers then were jumping in with adjustable rate mortgages with little regard to prices rising faster than appraisals. When the bubble burst and home values crashed these new buyers found they owed more than the property was worth magnified by rising unemployment and a faltering economy.

She said even if buyers today are willing to pay more than the appraisal it will be harder for them to get a lender to go along with it, leaving those who can afford to buy with cash at an advantage. There are more cash purchasers than in the past, and they are more attractive to sellers than those who have bank financing or a loan from FHA, VA or USDA.

“We’re expecting the housing market to be strong through 2021,” Ms. Williamson said, and as the pandemic subsides “more people will be able to qualify for homes.” Interest rates are expected to rise somewhat, but she expects they will remain below 4%.

“Lenders don’t want to put people in homes they can’t afford,” she said.
Currently there is less than four months inventory available for sale in Somerset County. Ms. Williamson said new construction should be happening at a faster pace because of demand, but currently material shortages and wait times are hampering that market.

She also said other counties, like Sussex in Delaware, are “builder friendly” and attracting homebuyers out of Maryland.

Members and subscribers make this story possible.
You can help support non-partisan, community journalism.

x
X