Why are Houses So Expensive?
The COVIC epidemic, which began in the spring of 2020, created the onset of higher house prices. What the heck? How did that happen? What’s going on? Why are house prices so high?
Maryland Real Estate Market Conditions
It’s been a sellers market in Maryland for several years. The Maryland housing market remained a strong sellers market for several years, which was surprising, especially due to COVID. The low interest rates were a huge driving force. Maryland is also a state with employment opportunities, so a lot of people were still able to buy a house because they remained employed throughout COVID. However, the market has slowly been shifting.
Not Enough Houses for Sale
There has been a severe shortage of houses for sale. Some homeowners like where they live and have no desire to move. Some homeowners have chosen to renovate their houses or add an addition. Other homeowners opted to take advantage of the low interest rates and refinanced instead of moving. Still others would like to sell their house and buy another. But they aren’t finding what they want and as a result, haven’t listed their house because they don’t want to be stuck with no where to live. This created a severe shortage in the number of houses for sale.
Too Many Buyers
Meanwhile, there were a lot of buyers. Those buyers consisted of renters who knew they could buy and have a mortgage payment that was less than or equivalent to what they had been paying in rent. There were buyers who could afford to “move up” from a condo or townhouse, and there were buyers who desired to downsize after raising their families. The vast majority of the buyers were moving away from Baltimore City, Montgomery, Anne Arundel, and Baltimore counties. So, ultimately, there were a lot of people who were trying to find a house to buy, and not enough houses to go around. This created low supply in the number of houses for sale and high demand from buyers. In turn, this caused house prices to rise. The housing price increases didn’t just occur in Maryland. The housing market increased in many different parts of the United States.
Why are Houses so Expensive? The Bottom Line…
This scenario created fierce competition. Multiple buyers were making offers on, and competing for the same houses. The buyers who were making the highest and best offers were the ones who were getting the houses. That’s why house prices have risen so much. Houses were selling for the list price and above. Sellers were receiving such great offers that they are quickly accepted the best one. And as a result, many houses went under contract in a matter of a few days. Buyers only have one opportunity to make an offer, so they were making the best offers they were able to make right from the start. Buyers were willing to pay more to get the house they want, which meant a house price increase. Fortunately, the low interest rates meant buyers were still paying less in interest, even though they were paying more for a house.
Buying a House Despite Rising House Prices
Is it possible to buy a house even though houses are so expensive right now? It certainly is! Buyers who are pre-approved for a mortgage and who make their highest and best offer from the start have the best chance of getting the house they want. Even though house prices have gone up, an accredited buyers agent can help you take your personal circumstances into consideration so you can make your best offer. Melissa Spittel is an accredited buyers agent in Maryland and Pennsylvania who helps buyers put a great offer together. Download the FREE Home Buying Checklist” if buying might be in your future!
Selling a House
Anyone who has a house to sell must understand the differences between selling in a buyers market. vs a sellers market. Houses need to appraise, so it’s important to be realistic with house pricing and accepting an offer over list price. If selling is in your plans, you’ll benefit not only from understanding the market, but also from terrific marketing. And that marketing can begin before your even house hits the market! Don’t kid yourself by thinking all REALTORS® market houses the same way, because that’s a big misconception. Do you want the minimal amount of marketing or the most? Download the FREE “Home Selling Checklist”.
💬 Let’s Make Your Real Estate Goals Happen
Hi, I’m Melissa Spittel, the trusted North / Central Maryland and Southern Pennsylvania real estate expert and a local agent with Corner House Realty.
After over a decade helping clients across Maryland and Pennsylvania, I bring a unique blend of deep local knowledge, sharp market insight, and a focused, confident approach to every transaction. Think of me as your seasoned guide, ready to make your real estate journey straightforward and successful.
How Can I Help You Next?
✅National Relocation: Moving out of MD or PA? I can connect you with vetted, top-tier agents nationwide through my trusted network.
✅First-Time Home Buyers: Guiding you through the entire process, from understanding financing basics to receiving your house keys with confidence and clarity.
✅Home Selling and Downsizing Expert: Specializing in seamless transitions for clients moving into smaller homes, larger homes and Adult Communities.
✅The Local Edge: Deep-rooted expertise in areas like Carroll County, MD, Baltimore County, MD and York County PA, to give you a strategic advantage in a competitive market.
