The housing market has dominated the news cycles for the past several years. Historically high median home prices, rapidly rising inflation, and the Federal Reserve’s move with interest rates have certainly been causes for heavy reporting on this important financial sector.

However, the national trends and forecasts for real estate do not necessarily reflect what is currently happening in the more than 80 major local real estate markets in the United States. Knowing what the future of Annapolis real estate could likely bring will be important information when you make the move to buy or sell a home.

During the early months of the Covid-19 pandemic, the housing market was still suffering from the 2008 financial crisis. In the aftermath of the Great Recession, new home builds dropped substantially and still had not fully recovered more than a decade later. The already short housing supply in 2020 became even smaller as supply chain issues ground new construction to a near halt. With such a low supply and a high demand, median home prices soared to historic levels.

The Federal Reserve began to increase interest rates 18 months ago in hopes of winning the battle against inflation and also to drive down home prices. This created a cooling effect on the national housing market, with year-over-year median home prices dropping for the first time in ages in April of 2023.

Experts forecast that the housing market will continue to cool, but only so much before it levels off. Though many potential buyers are hesitant with interest rates continuing to increase, the supply of available homes is still low. The high demand is keeping home prices well above the pre-2020 prices.

But what happens nationally doesn’t necessarily reflect what experts forecast for local markets.

At the end of 2022, market forecasters predicted that the housing market in Annapolis would continue to grow in 2023. Despite rising interest rates, the demand for homes grew steadily throughout the previous year. So far in 2023, this is a continuing trend.

The homes for sale in Annapolis are still in shorter supply, keeping median home prices up when they have fallen slightly in other local markets. The area's growing popularity has also helped keep the demand and home prices higher than ever. But will this trend continue over the rest of the year?

Rising interest rates could very well cool the national market further. But as long as there are fewer available properties for buyers to purchase in Annapolis, rising interest rates will not slow the growth much.

The market in the capital city will only level off if the demand for homes decreases. But there is no sign of that happening anytime in the near future.

If you are considering selling your home in Annapolis, you’ll be in a hot seller’s market. While the bidding wars of 2021 and early 2022 aren’t as fierce, many sellers are receiving well over the list price for their homes. This makes it a great time to list.

This seller's market could continue depending on what the Fed does with the interest rates over the rest of the year. But the more rates increase, sellers will likely lose their advantage.

Having a real estate agent will greatly benefit you as a seller in this market. Along with taking care of the legal aspects of selling real estate, an experienced agent will be able to attract the most qualified buyers to your listing, helping you maximize your home's value.

Some buyers will certainly wait to purchase a home in such a strong seller’s market. But there are several great reasons to buy in this city today for any potential buyer to consider.

The Federal Reserve is expected to continue to increase the base interest rate. If you think you can wait out the rates until they drop, you might be waiting longer than you think. Buying today takes advantage of rates that will likely be lower than they will be at the end of the year, saving you a great deal of money over time. Additionally, you can always refinance down the road when rates do decrease.

Other buyers are hesitant to secure a new home because they feel that home prices are too high and are waiting for median home values to drop. And though a buyer will certainly pay substantially more for a home now than in 2019, the trend in Annapolis points to prices continuing to rise.

If this holds to be true, a buyer today will build quick equity in a home without investing more than the purchase price. Buying today also means that a home will be purchased for less than what it might be worth by the end of 2023.

Carefully review your financial situation with your mortgage broker. Using an experienced buyer’s agent when exploring the real estate market in Annapolis is also recommended.

Buying or selling real estate should be carefully considered and planned. After all, the home is the largest single investment for most Americans. As a buyer, you’ll want to get the best deal possible. And as a seller, your primary objective is to get the most for your home at closing. Whether buying or selling Annapolis real estate, you will greatly benefit from the experience of dedicated real estate professionals. The agents on the Tower Team know this market inside and out and will make your real estate transaction a seamless and stress-free experience. Contact the team today to get started!