Wicomico County Mid-Year Housing Report 2022
State of the Salisbury MD Area Real Estate Market
As of June 30, there were 657 settlements on residential housing units in Wicomico County in 2022, down 8% from this time last year. The median sales price in the Salisbury MD real estate market was $250,000, up 22% over same period. Foreclosures and short sales have accounted for 2% of residential sales in the Wicomico County this year, down from 4% at the mid-point of 2021.*
Looking back at the projections for this year in the 2021 Year in Review has been interesting. So far, we were correct that mortgage rates would rise and home sales would slow. Our thoughts at the time were that home prices would begin to level off but so far in 2022 that has not been the case. With nearly full employment and record high equity for property owners, the percentage of distressed sales did not come as a surprise. The local housing market has now seen price increases on a yearly basis for 22 consecutive months.
Housing Outlook in Salisbury MD for the Second Half of 2022
For the remainder of the year, homes sales should closely mirror the results seen in the first half or around 600-650 units closed. Home prices should come in around 10%-12% higher on a yearly basis. Many people don’t realize that home prices nationwide rose in the three out of the last five recessions (the U.S. is in a recession now, it’s just not official yet). The most recent recession of 2008-2009 was housing/mortgage driven and one where home values dropped considerably. This makes it tempting to believe it will repeat itself over the next 12-24 months but history does not bear that out. Somewhat lower demand will not solve the inventory problem by itself. This short video goes more in depth on that subject.
The main factors impacting the Salisbury MD area real estate market for the rest of 2022 will be mortgage rates and unemployment. The Fed’s moves to rein in inflation have not proven effective thus far and their primary tool is interest rate manipulation (on an upward trajectory.) Further increases in mortgage rates (which tends to correlate with the Federal funds rate) will certainly hurt demand for housing locally.
What the Federal Reserve’s recent actions have done (removing liquidity from the equities markets) is produce the worst first six months in the stock markets in decades. Should this trend continue, large corporations will have no choice but to “tighten their belts” with cost cutting of their largest expense- that being labor. Fewer customers for goods and services as a result of inflation will make this a near certainty in the coming months.
*Based on information from the Coastal Association of Realtors® for the period 1/1/21 through 6/30/21