Lower Eastern Shore, Md. – Increased interest rates and home prices continue to slow the market on the Lower Shore, according to the latest numbers from the Coastal Association of REALTORS® (Coastal).
New residential settlements in December 2018 were down by 27 percent overall compared to the same time last year in Somerset, Wicomico, and Worcester counties. Individually, settlements were down by 33 percent in Worcester, by 15.3 percent in Wicomico, and by 44.4 percent in Somerset. Year-to-date settlements across the Tri-County area totaled 4,443, which is four percent lower than the same time last year.
New listings that went on the market in December were down 14.8 percent compared to the same time last year in all three counties. That translates to 304 new listings and 3,091 active listings. Individually, available units were down by 14.7 percent in Worcester, by 24 percent in Wicomico, and by 3.2 percent in Somerset.
List prices continued to rise last month, reaching an average price of $195,027 in all three counties, which is 6.1 percent higher than the same time last year. The average sale price, however, was $182,995, which is eight percent lower than the same time last year.
“We saw four interest rate increases in 2018, and that, paired with increased listing prices, can cause some sticker shock, particularly for first-time buyers,” said Coastal President Bernie Flax. “The interest rate increases are expected to slow this year, so we’re hoping that will lead to an activity boost in the local market.”
In the National Association of REALTORS® (NAR) October 2018 market report, NAR Chief Economist Lawrence Yun said rising interest rates and increased home prices are suppressing the rate of first-time buyers across the country, and the market could see further decline before stabilizing.
“The Federal Reserve should, therefore, re-evaluate its monetary policy of tightening credit, especially in light of softening inflationary pressures, to help ease the financial burden on potential first-time buyers and assure a slump in the market causes no lasting damage to the economy,” Yun said.
Coastal’s monthly local housing statistics are pulled from the Bright Multiple Listing Service, which represents the activity of over 1,000 local REALTORS® in Somerset, Wicomico and Worcester counties, as well as 85,000 real estate professionals across the Mid-Atlantic. The Bright MLS service area includes Maryland, Delaware, New Jersey, Pennsylvania, Virginia, Washington, D.C., and West Virginia.