Is the Maryland Housing Market Going to Crash in 2023?

Throughout 2022, you may have heard a number of people telling you that you should expect a crash in the Maryland housing market this year. But despite all these bleak predictions, there is actually a lot less to worry about than you might think. Let’s take a look at why you may have heard the Maryland housing market could crash, and why a slower, less dramatic decline may be more likely.

  • A Bubble About to Pop?
  • About the Decline…
  • The Possibility of a Maryland Market Crash
  • What You Can Expect

A Bubble About to Pop?

Economically speaking, many refer to the rapid rise in the market value of an asset—like real estate—as a bubble. Using this image of a bubble to describe the current market conditions implies that it will eventually pop. In this situation, many interpret “pop” as meaning a massive, dramatic, downward crash in the housing market. This is what a lot of people have been gearing up for over the past year, and understandably so. Current prices in the Maryland real estate market are significantly higher than they normally should be.

However, this doesn’t mean for certain that a crash is going to happen. Based on past trends and the way things are currently headed, we are expecting a slow, gradual decline in Maryland real estate prices in 2023, rather than a devastating market crash.

About the Decline…

Lower housing market prices are great for buyers but a less than ideal scenario for sellers and real estate agents. Competition in Maryland is high because there are so few homes on the market in the first place, and lower-priced houses usually get offers very quickly. If you’re planning to sell your home in 2023, now is the time to get your home on the market while demand is high and prices are higher.

The Possibility of a Market Crash in Maryland

Even though signs don’t point to a crash at this time, the housing market is not perfectly predictable. Given the right conditions, a market crash could happen whether we expect it to or not, and it can be good to prepare for the worst, even when it is unlikely. There are plenty of causes that could lead the market towards a crash, and in the right combination, they could push the market off the edge. Here are a few factors that contribute to the instability of the housing market:

Unemployment

Unemployment rates don’t affect much when they go up by a small amount, but a big upward shift in unemployment rates could drag the housing market down. If a lot of people are without jobs, they may end up frantically trying to sell their houses, and foreclosure numbers could rise.

Homebuilding

When it is thriving, homebuilding leaves more desirable houses on the market. However, during the pandemic, many builders struggled with rising material prices and increasing difficulty in obtaining building permits. This can lead to a shortage of homes for sale, which causes prices to rise as they have recently. We are already expecting a continuation of this slow progress in the new-home market in 2023.

Buyer Demand and Motivation

These are arguably the two most important aspects of the housing market in Maryland. After all, if no one is buying houses, the market wouldn’t exist at all. It would be a very bad sign if the public’s demand and motivation to buy houses started to drop suddenly.

What You Can Expect

In the coming year, we think you should expect to see prices gradually decline in the housing market. While this might sound scary, remember it is nothing to worry about! Prices have skyrocketed in Maryland recently, and they will simply be sinking back to a more appropriate market value.

If you’re thinking of selling your home or buying a new one, there is no one better to help you than our team, Reynolds EmpowerHome Team. We’ve helped thousands of families through dramatic market shifts, and we have decades of experience navigating the changing markets, so you can rest assured that we can get your home sold regardless of whatever the 2023 markets have in store. Most sellers last year had to call a second or third agent to get the job done, or even worse, not sell at all. The agent you hire the first time matters! Our team sells 98% of our listings the first time, so when you hire us, your home is more likely to sell fast & for top dollar! 

Call or Text us now at 571-464-8883 to start working with a team that will help and support you every step of the way!

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