If “For Sale” signs or even new homes are springing up in
your neighborhood it’s due to the new demand for housing.
Somerset County is not immune to this national trend, and
despite fewer transactions last year prices continue to rise making it a
seller’s market as available inventory is slack. See the story at https://baytobaynews.com/somerset/stories/homebuying-returns-to-crazy-pace,49608
Homebuying returns
to ‘crazy’ pace
Somerset County lacks
inventory as average sale price rises;
more buyers than listings
By Richard Crumbacker
Crisfield-Somerset County Times
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.
