Welcome to Maryland
Tucked in the center of America’s East coast in one of the country’s most economically influential regions, Maryland boasts a diversity of communities, geography, and industry. Washington D.C.’s metro region offers a high quality of life and some of the most competitive real estate in America. Central Maryland, anchored by Annapolis and Baltimore, is rich in the state’s history, local culture, and business. Further east is the Atlantic coast, an area filled with vacation opportunities and second homes.
Coupled with its proximity to influential cities like Washington D.C. and New York, Maryland’s real estate market serves a high-end clientele.
Welcome to 2020
The COVID-19 pandemic has been one of the most impactful global events in decades. As countries quickly enacted quarantine shutdowns to contain the virus, an international recession hit the world’s economy. The necessary social distancing harshly affected many industries. The airline, hotel, entertainment, and restaurant industries have been hit particularly hard and are struggling to adapt.
However, real estate in America has been one of the few industries to not only survive but to thrive at unprecedented levels during this volatile time. This is particularly true of luxury real estate, and we’ll examine these key changes in Maryland and how to navigate them.
1. It’s a Seller’s Market
The events of 2020 have turned America’s luxury real estate industry into an unquestionable seller’s market, where demand outweighs supply and the resulting shortage creates an advantage for people looking to sell property. Maryland is no exception.
According to Redfin, the median home sale price in America increased 15% over the past year - the highest on record. This exciting change was not limited to summer, which is traditionally the buying peak of the year. National sale trends continued to rise through autumn and into the fall, bucking the usual decline.
Additionally, the uncertainty of election years causes a reduction in sales as consumers practice more caution. However, the strength of lower interest rates has challenged this trend too. Sales remained high and increased in the months leading up to the election.
Narrowing our focus to Maryland, we can see the state has followed this national trend. Redfin’s data demonstrates that the median sale price in the state increased to $333.942 (14.4 YOY) with an average of 29 days on the market, down from 41 in 2019. Dee Dee Miller, president of Maryland realtor, describes “…when you look at housing statistics, sales continue to outpace expectations. Real estate has proven to be a significant driver of the economic recovery from the pandemic”.
If you own luxury real estate and have been thinking of selling, the signs could not be more clear. Sell now. Enjoy, at a minimum, a sale at your listing price, as 100% of the region’s sales reached their listing price. More likely, you will receive higher bids. To top it off, your house will sit on the market for significantly fewer days than it would have in the past years.
Although the record-breaking statistics of this year’s seller’s market have remained steady since the start of the pandemic, there is no guarantee how long they’ll last. If this year has taught us anything, the future is uncertain. Employ a qualified real estate agent to guide you through a sale during this exciting time, and sell your luxury real estate today.
The advantages you have as a luxury real estate seller during this time are real, but so are the safety threats posed by the coronavirus. Gone are the days of casual in-person showings with a steady stream of prospective buyers waltzing through your home. Safety should remain a priority, and the world is turning to a plethora of technology at our disposal to continue business.
Video conferencing has quickly become a staple of communication during the pandemic, and this is also true of the real estate world. Use Zoom or other professional video conferencing services to communicate with your agent and prospective buyers.
High-resolution photos have always been used in selling luxury real estate, but during these times, they play an even bigger role. More professional photos of the space will help reduce the need for an in-person visit, as does a virtual walkthrough. With the fast turnaround of the current market, many buyers are forgoing the time it takes for an in-person visit anyway.
2. People’s Wants and Needs Have Changed
The nature of the virus and government stay-at-home orders have radically altered the ways people go about their lives and think about their circumstances. Whereas homes used to simply function as homes, people now need their dwellings to operate as a workspace, school facility, entertainment center, on top of all the regular requirements needed out of a living space. It’s a lot.
Additionally, the pleasures which made urban areas worth the high cost of living with smaller personal space have been curtailed. Museums, bars, and social clubs have closed. Restaurants and gyms operate at reduced capacity and are vulnerable to future shutdowns.
With COVID-19 case counts rising nationally, these changes do not appear to be going away anytime soon. What was once a cozy pad in a city has now become a confining space with little payoff. As early as April, buyers have been casting their eye at living spaces that are larger, place more emphasis on comfort, and are located in regions where one has more personal space.
The following are key features that make properties particularly attractive to buyers during these times. If selling, consider incorporating these features into your property if you don’t already have them. If buying, be aware that these attractive features not only make the property more valuable but also more competitive.
According to The Washingtonian, the number one feature house buyers are considering is the internet. With working from home and children being schooled through online portals, internet connections have heavy lifting to do. If selling, it’s worthwhile to install a higher performance internet as it could raise your asking price.
This goes without saying. Almost all office jobs in America are now being done remotely. A piece of property that includes a decently constructed and outfitted office is particularly enticing. People are tired of working from their dining room tables or dingy garages, and having a designated office space is ideal nowadays.
Although some gyms have started to reopen across the country, the COVID restrictions make them frustrating to navigate, and even then there remains a risk.
A pool is particularly attractive, but installing one can be costly and complicated. Instead, consider converting a bathroom into something more spa-like, or arranging the basement to feature an area perfect for exercise equipment. These simple renovations could potentially have a big effect on a buyer’s interest in your property.
3. Buyers Have It More Challenging
The nature of a seller’s market creates a more challenging arena for buyers. If you're looking to purchase luxury real estate during this time, you will have to contend with higher prices and demand. However, there are a few strategies you can employ to maximize your chances.
Be Smart With You Approach
Accept the new reality we’re living in. Be prepared to pay over an asking price, and be ready to buy at all times. Consider using a Prosperity Home Mortgage to receive an underwritten pre-approved loan without owning a property.
Once you start a dialogue with a seller, you will have to move quickly. There is no time for games. Start with your highest and best offer. Accept the inspection process will likely be less thorough than in the past. Consider using virtual walk-throughs and photographs of the space in place of an in-person visit, as that could save you precious time.
Maintain A Healthy Outlook
We are living through difficult times. Life as we know it has changed dramatically, and it’s crucial to prioritize both our mental and physical health.
It’s tempting to become discouraged while navigating a seller’s market. To keep a negative outlook at bay, lean into the positive things you have during this time. Be grateful for the new time afforded to you to spend with your family. Be grateful for your health. Even the small things, like not having to contend with daily commuter traffic, are worth having gratitude for.
Despite the challenges you will have in buying, working with a qualified real estate agent and remaining smart and committed will help you snag that piece of luxury real estate you’ve been looking for.
Thinking of selling your luxury real estate or looking to buy in Maryland? Please feel free to contact us today, as we’d be happy to guide you in selling your Maryland Luxury Real Estate, or show you available homes for sale in Maryland.