What to Expect in the Ocean City Maryland Real Estate Spring Market
Ocean City Maryland Real Estate Spring Market
Ocean City Maryland is a great place to buy a vacation home. The prices for vacation homes in Ocean City have been on the rise in the past year. However, on average they are still more affordable than beach area homes in other parts of the East Coast.
In addition, Ocean City is a great place to invest in real estate. The city has been growing rapidly in recent years, and it is only going to continue to grow. If you are looking for a place to buy a vacation home, Ocean City should definitely be at the top of your list.
The Ocean City real estate spring market is one of the best times to buy if you are looking for a vacation home. Many homeowners put their Ocean City MD real estate on the market in late winter and early spring. That makes winter the ideal time to start your vacation home buying journey (finding areas you like, figuring out your budget, talking with a lender, etc.) before the new properties hit the market.
There are a great number of condos in Ocean City Maryland. Ocean City is a popular vacation spot, so many people invest in condos here. The prices vary depending on the size and location of the condo. There are many affordable options.
The average home price in Ocean City that went under contract during December 2021 was $429,000. Meanwhile, the median home pending sale price for December 2021 in Ocean City Maryland was $394,000.
Why is there a difference between average prices and median prices?
The median price is the home price that is in the middle of all of the other home prices. This means that half of the prices are above it and half of the prices are below it. The average home price, on the other hand, is the sum total of all of the home prices divided by the number of homes sold.
A large number of lower-cost condo properties keep the median price of real estate in Ocean City much lower than the average price. The median pending sale price for the year in Ocean City Maryland for the entire 2021 year was $360,000.
Interest Rates and Mortgages
The national average 30-year fixed mortgage APR is 3.770% as of February 3, 2022. That national average is up 9 basis points since last week. A basis point is one-hundredth of a percentage point. So, in a 30-year fixed mortgage, a rise of 9 basis points would mean that the interest rate has increased by 0.09%.
Another rate to keep track of is the Federal Funds Rate. It’s the interest rate that banks charge each other for overnight loans. It’s an important rate to keep track of in figuring out what mortgage interest rates will be going forward. The Federal Funds rate remains at 0.25, the rate it’s been at for the past year.
The Fed has signaled that it plans to increase the Federal Funds Rate this coming year. The consensus among economists is that the Fed will increase it by 0.50%. If the Federal Funds Rate increases, then mortgage rates should also go up.
5 reasons that interest rates affect mortgages:
- The cost of borrowing money: One of the most important reasons that interest rates affect mortgages is because they affect the cost of borrowing money. When interest rates go up, it becomes more expensive for people to borrow money. This means that people have to pay more for things like mortgages and car loans.
- A borrower’s risk premium: A borrower’s risk premium is the extra amount of money that a borrower pays to lenders in order to compensate them for the risk of not being repaid. This can be in the form of a higher interest rate, points, or both. When lenders feel that there is a higher risk of not being repaid, they will require a higher risk premium from borrowers.
- How much credit is available: The amount of credit that is available affects mortgage interest rates because it affects the supply and demand for mortgages.
- The effect of inflation on interest rates: Inflation can affect interest rates because it can make it more expensive for homebuyers to borrow money. This is because inflation causes the value of money to go down.
- Mortgage market liquidity: Liquidity in the mortgage market is a measure of how easily lenders can buy or sell mortgages. When the mortgage market is liquid, it means that there are many institutions interested in buying and selling mortgages. This gives lenders confidence since they know that they will be able to quickly sell the mortgage if they need to.
Buying a House in Ocean City Maryland
The Ocean City Maryland real estate spring market is a good time to buy. That’s true whether you’re a first-time homebuyer or just looking for a larger Ocean City Maryland real estate space, Ocean City is close to Ocean Pines (with access to Ocean Downs Casino) and Assateague Island. Ocean Pines also has many amenities including golf courses, shopping centers, restaurants, and more.
The Ocean City Maryland real estate market begins to heat up after the winter months and into the spring months. The demand for Ocean City MD homes and condos is high as many people look forward to their summer vacation in Ocean City.
The area is commonly referred to by locals as OCMD or just OC. Ocean City brings in buyers from all over the Mid-Atlantic area. Best of all, it’s only an hour and a half away from Baltimore or Washington DC!
You should consider these things if you’re buying a vacation property in Ocean City Maryland
What are my wants vs what are my needs?
Wants are a list of features that you would like in a property, while needs are a list of features that are required in order for you to purchase the property.
For example, a buyer who is looking for a vacation home in Ocean City Maryland may want a property that is within walking distance to the beach. On the other hand, they may need three bedrooms in order to accommodate their entire family.
How much can I afford to spend on a vacation home?
Debt-to-Income (DTI) is a calculation used by lenders to determine how much of a mortgage you can afford.
Lenders determine the DTI ratio by dividing your total monthly debt payments by your gross monthly income. For example, if you have $1,500 in monthly debt payments and earn $6,000 per month, your DTI would be 25%.
Many lenders will limit a borrower’s mortgage to 36% of their DTI ratio. So, in the example above, the lender would likely only give the borrower a mortgage for up to $2160 per month (36% of $6,000).
When purchasing a vacation home, it’s important to remember your total monthly expenses. That includes the mortgage payment, homeowner’s insurance, property taxes, and any homeowners association fees.
Will I offer my home for short stay vacation rentals?
A short stay vacation rental is a property that is rented out for short periods of time.
There are pros and cons to renting out your Ocean City Maryland real estate property on a short-term basis. On the plus side, you can earn extra income from your vacation home while also enjoying it yourself for a few weeks each year. However, there are some things to keep in mind before deciding if short-term rentals are right for you.
First, you’ll need to decide if you want to manage the rental yourself or hire a property management company. Property management companies typically charge a commission (usually 10-15% of the rent) and may also have minimum rental periods.
You’ll also need to make sure that your Ocean City vacation home is properly set up for short-term rentals. This includes things like providing quality WiFi, enough parking spaces for the number of guests expected, and a cleaning service between rentals.
Finally, you’ll need to market your Ocean City Maryland vacation home to potential guests. Websites such as Airbnb and VRBO offer help on how to start planning for rentals.
The spring real estate market in Ocean City Maryland
Ocean City Maryland is a prime spot for vacation homes and condos. There are several reasons why this city makes sense as your next vacation home. OC has Ocean Pines to the east, Assateague Island to the south, Ocean Downs Casino in Ocean Pines, and an hour and a half from Baltimore or Washington DC.
The Ocean City Maryland real estate spring market begins to heat up after the winter months. So now is a great time to take advantage of what’s available on the market!