ValcoMD Market Conditions Update Baltimore / Washington DC Metros:
December 2025 Housing Market Update: The DC Metro median sales price grew a healthy 5.0% to $630,000, with showings slightly rising 0.8%, all else was negative as closed sales fell 6.4% active inventory increased 33.7%, new listings fell 5.5%, pending sales were down 4.8%, months of supply continues to rise at 2.22, and days on market jumped to 22.
The Baltimore Metro median sales price was flat at $399,990, showings similarly rose 2.0%, closed sales dropped 9.1%, active inventory popped 27.2%, new listings fell 3.5%, pending sales fell 1.4%, months of supply jumped to 2.29, and days on market rose to 20.
Within Maryland for Nov 2025 vs 2024 saw $430,000 median SP$ gain 1.2% while all else was mostly negative except pending sales which marginally grew from 5,107 to 5,220. Active inventory slightly fell from 14,434 to 14,148, new listings declined from 5,634 to 4,570, closed sales fell from 5,474 to 4,769, months of supply were stable at 2.5, and day on market rose from 12 to 20.
Will there be a near-term real estate market value fall? While I am not an economist, influencer or prognosticator, I survived and thrived in multiple valuation shifts over the past 30 years. I do not see a significant national decline on the scale of the 2008 crisis, when I left Metro NY in 2005 for an opportunity in real estate and mortgage default. I may have been a little early then, but the signs were already there. Many of these indicators are absent from the current market including: default / foreclosure sales, flipping and predatory practices creating more default sales, private equity and single family homes as an asset class did not yet exist (the sale of pre foreclosure and REO properties into rental pools almost stopped the REO to REO again cycle), approximately 40% of all homes do not have a mortgage, about half of all mortgages have a fixed rate of less than 4%, fraud is minimal, circuit breakers and policies established by the FHFA/GSEs, strong stock market, local markets change fast (it was not that long ago everyone wanted to invest/live in Austin, TX and Tampa, FL), and other predictive signs. However, I see three concerns: many newly built communities show some cracks, a valuation bubble, and a lack of affordability in most markets. The spread between personal income and real estate values is the largest ever and the rapid growth of upscale new rentals has forced many into a downward spiral of escalating rental payments eating their increased incomes. I bought my first home in Metro NYC in 1991 at 10.375% rate not to make $, but to lock in payment for the next 30 years (not 50 years) as rents rarely decline. Two houses and fourteen years later, I had enough equity not to need a mortgage for my next house (that can’t happen when you rent). Home ownership, when the cost to own is less than renting, is a logical and crucial step for building generational wealth. Conversely, home ownership is not for everyone. Dropping interest rates will not help these new buyers (does anyone remember 2020-22?). A drop in rates will spike mortgage (mostly refi) and appraisal activity along with home prices, but it will NOT significantly support first time buyer purchases and homeownership rates. May I suggest establishing first time homebuyer bonds/programs that enable only first time buyers to buy a home with a significantly lower fixed interest rate (2-3 points below market) and allow them to buy with a smaller downpayment (min 5%, no PMI, renovation option, and discounted closing costs), but NOT no downpayment (as history has shown the risks) with mandatory approved homebuyer counseling coupled with consistent and responsible underwriting. FHFA, GSEs, and HUD possess the necessary data, expertise, and resources to underwrite and manage a structured program as there have been other successful limited programs over time. It is time to implement a large-scale, sustainable solution. If you agree that we need to stop rewarding those who already own and start supporting the next generation of homeowners, please share this message.
Source: Bright MLS and Associated State, Local RE Boards, US Census, WSJ.com, Newsweek December 18, 2025
The GSEs announced that they will require appraisals to contain a Market Area analysis to support time adjustments and market conditions in Q1 2025. This does NOT have to be complex or time consuming, but that does not minimalize its importance. We have been providing similar information in every report since 2020 (see below). We are not statistical or analytics experts. However, one of the most important roles of the local appraiser is to provide data and comment on local market stats and trends. A robot can pull the data and provide the stats, but only the local pro can reconcile the data and guide the reader to see the issue(s). A doctor returning an x-ray or scan from a technician, and not providing an interpretation is worthless to the patient.