The Mid-Atlantic region likely will see its smallest home-sales total since 2015 in the coming year, but the year-over-year dropoff across the Washington region is expected to be slightly less than the drop expected nationally.
A total of 247,500 home sales are expected across the area covered by Bright MLS, which tracks home sales and provides services to Realtors in the Washington, Baltimore and Philadelphia metropolitan areas.
That’s a decline of about 4.6 percent from the approximately 259,400 sales anticipated once all the figures are in for 2022, which itself was down about 19 percent from the 320,500 sales of 2021.
(Figures represent all or parts of six states – Delaware, Maryland, New Jersey, Pennsylvania, Virginia and West Virginia – plus the District of Columbia, which in 2021 collectively represented $141 billion in home transactions.)
“Home sales are expected to dip across the region’s three major metro areas, with sales in 2023 down 1.9 percent in the Philadelphia Metro, 6.4 percent in the Baltimore metro and 4.1 percent in the Washington metro area,” said Lisa Sturtevant, chief economist for Bright MLS.
“More buyers will be returning to the market as we move through 2023,” Sturtevant predicts. “However, inventory will stay relatively low, as many existing homeowners remain ‘locked in’ to their low rate. As a result of rebounding demand and still-low inventory, home prices in the Mid-Atlantic will be relatively stable.”
To put that into a number: The projection is that the median home-sales price across the Mid-Atlantic will rise 0.5 percent in 2023, following gains of 6.1 percent in 2022 (almost all of it during the first half of the year) and 11.1 percent in 2021. Across the three metro areas, the median price is expected to rise 1.1 percent to $560,500 in Washington; 0.7 percent to $354,000 in Baltimore; and 1 percent to $330,000 in Philadelphia.
Nationally, the expectation is for about 4.87 million home sales, down 6.4 percent from a 2022, which itself was down 15.1 percent from 2021. The median home-salesvalue of $385,000 is expected to be up 0.3 percent from a year before, after rising 9.5 percent from 2021-22.
Forecasts are based, in part, on the supposition that interest rates for home mortgages will hover in the range of 6 percent to 6.5 percent for 2023, with (slightly) lower rates from 2022 and fewer gyrations up and down restoring confidence in buyers to hop into the market.
While there could be a significant national downturn in real estate, “the major-metro-area housing markets in the Mid-Atlantic are in a better position to fend off a major market correction than many other U.S. regions,” Sturtevant said.