Market Report: Q1 2025
- Spotlight Real Estate Group
- 5 days ago
- 2 min read
Opinion: Chris' Thoughts
Our local housing market continues to demonstrate price appreciation, with the exception of Cecil County, which experienced a prolonged period of elevated appreciation extending 18 months beyond regional trends. However, it is important to note that the overall market is exhibiting a deceleration in growth compared to the peak levels observed in 2022.
Despite this moderation, price increases remain above historical averages. Further analysis of important market indicators reveals a nuanced narrative. The average days on market (DOM), a metric reflecting the time required for a property to sell, has transitioned from a seller's market (<30 days) to a neutral market (30-60 days). At the same time, the list-to-sales price ratio continues to indicate that properties are generally selling at or near their initial asking price, with high-demand properties still frequently realizing prices above the list price. Consequently, significant price reductions should not be anticipated, particularly for quality homes in desirable neighborhoods.
Is this good news for everyone? Not exactly.
Homeowners:Â The substantial price appreciation of recent years has resulted in a significant growth in home equity. Some homeowners are experiencing a disincentive to sell due to the prevailing higher interest rate environment compared to their existing mortgages. This can create a sense of being "stuck," as moving to a comparable property would likely entail a higher monthly payment.
Homebuyers:Â Affordability remains a primary concern for prospective buyers. Despite elevated interest rates and constrained inventory levels, underlying demand persists. The rate at which homeowners are listing their properties is not keeping pace with buyer demand, resulting in a limited supply of available homes. This imbalance continues to push prices up, posing a significant challenge, particularly for first-time homebuyers seeking to enter the market.
Renters/Landlords:Â The rental market has also witnessed significant price escalation over the past five years. This increase has placed considerable financial strain on renters, preventing them from saving for down payments and exacerbating the affordability challenge. Conversely, landlords have been able to adjust rental rates in response to demand. From this, their initial return on investment (ROI) projections, which may have been in the vicinity of 5%, are now yielding returns of 15% or more in many instances. While the rate of rental price increases has stabilized, it has done so at this higher baseline.
New Castle County, DE
Cecil County, MD
Chester County, PA
