Maryland’s Housing Market in 2025: Sluggish, Not Stuck

If you’ve been listening to the news, you’ve probably heard that the housing market is “frozen”—homes not selling, prices stuck, confused buyers and sellers everywhere. Is that really the case in Maryland this year? Well, yes and no. The real story is... complicated. Let’s break down what’s actually happening all across the state—and what it means if you’re hoping to buy or sell in 2025.

1. The Big Picture: Has the Market Really Frozen?

If we look back at early 2025, Maryland’s housing market was still running pretty hot. Prices jumped about 2.5% per quarter in 2024 and into early this year. The average home price hit $486,385 statewide—a new high that was great for sellers but tough for buyers.

But as spring turned to summer in 2025, things shifted. Suddenly, homes were sitting on the market longer. In Montgomery County, for example, inventory shot up 56% from last year—but with only 1,400 homes available for more than a million residents, it was still a tight market. The spike in "for sale" signs didn’t come from a surge of new sellers, but from homes taking longer to go under contract as buyers held back, waiting for a clearer direction on rates and the economy.

Meanwhile, in Baltimore, things looked shakier. The area saw only a modest 1.4% price increase year-over-year; rising inventory and economic nerves—especially tied to large numbers of federal jobs—made things uncertain.

Nationally, stats in August showed median home prices actually dropping in 14 of the 50 largest US metro areas for the first time in years.

So, is Maryland’s market “frozen”?
Not exactly. In some pockets, yes, things have slowed. But calling the whole market “stuck” misses a lot of nuance—and a lot of opportunity, if you know where to look.

2. What’s Driving the Slowdown?

Inventory: Up, But Still Historically Low

A lot of the freeze is perception: after the rocket-fueled sellers’ market of the last few years, a little cooldown feels dramatic. Active inventory jumped in major counties like Montgomery—and yet, compared to historic norms, choices are still slim.

Sellers are reluctant to give up their ultra-low 2021 and 2022 mortgage rates. At the same time, buyers have become more sensitive about price and are more willing to wait or negotiate.

Federal Jobs: Stability or Question Mark?

Almost 7% of Baltimore’s workforce and even more in Montgomery and Prince George’s counties depend on federal employment. That means every budget showdown in Washington echoes in local housing confidence. For now, federal jobs provide some buffer—but everyone’s watching for signs of impact.

Affordability: The Biggest Issue

Rising home prices and mortgage rates have pinched buyers’ budgets. Even with a modest increase in listings, sticker shock has some would-be buyers sitting on the sidelines. Sellers, used to calling all the shots, are starting to face the new reality: pricing matters, even in desirable neighborhoods.

3. For Sellers: Time to Rethink Your Strategy

The Days of Multiple Over-Ask Offers? Gone (For Now)

There’s no sugarcoating it: the bidding wars and ten offers on day one are yesterday’s news—for most homes. Overpricing is likely to leave your house languishing. Now, more than ever, buyers are willing to negotiate, and they are looking for value.

What Sellers Need to Keep in Mind

• Price realistically: Check out similar homes in your neighborhood. Be honest about recent price reductions or sales that took longer than you expected. Work with your agent to nail the sweet spot.
• Presentation matters: With buyers taking more time to decide, properties that shine (good lighting, fresh paint, a tidy yard) still move faster.
• Flexibility wins: Be prepared for requests like a seller credit, home warranty, or longer settlement.
• Federal job areas: If you’re selling in a community with a lot of federal employees (think Howard, Montgomery, Baltimore City), keep an eye on economic news. Even a hint of public sector layoffs or hiring freezes can spook local buyers.

Remember: It’s not a “bad” market. It’s just not the wild seller’s playground we saw in 2021–2023.

Need specifics on pricing or prepping your place to sell? Check out our seller resources.

4. For Buyers: More Choices, More Power (But Be Smart)

It’s Not 2021—And That’s Good News

If you were frustrated by “Sorry, it went under contract before you could even schedule a tour” in past years, take heart. You now have more time to consider homes, compare options, and even ask for an inspection or other contingencies without being laughed out of the negotiation.

What Buyers Need to Consider

• Use your leverage: Homes sitting longer on the market mean sellers may be open to credits, repairs, or even a price drop.
• Act local: The “frozen” story varies by zip code. Some neighborhoods are still tight and competitive; others have more room for negotiation. Work with a local expert who knows the micro-markets.
• Do your homework: Stable income, pre-approved financing, and clarity on your must-haves vs. nice-to-haves will help you act quickly and confidently.
• Watch federal employment areas: Just like with sellers, buyers in these communities should consider potential job shifts as part of long-term planning.

Ready to dip your toe back in the market? Our team serves buyers at every stage—see more first-time buyer guides here.

5. Regional Variations: The Story Changes by Neighborhood

Don’t let broad headlines fool you—Maryland isn’t a one-size-fits-all market.

• Montgomery County: Inventory is up, but still below historical averages. Homes may sit longer, but the best ones are still getting action—know your numbers!
• Baltimore Metro: A tale of two markets: certain neighborhoods are stalling, especially entry-level and high-luxury properties. Others with walkable amenities or public transit access still find buyers, just at a gentler pace.
• Howard & Anne Arundel Counties: Strong schools and commutes to both Baltimore and DC mean prices are holding, but sellers need to be realistic.
• Eastern Shore & Western MD: More price sensitivity, especially on vacation or second homes—buyers are driving a harder bargain.

If you’d like a hyper-local market report on your neighborhood, reach out to us directly or check our frequent updates at Sold by Lily.

6. Advice for Navigating Today’s Market

Whether you’re buying or selling in Maryland in 2025, here are some big takeaways:

• Patience & Flexibility: Deals may take longer to come together. That’s normal! Use the time to negotiate and get what you want.
• Knowledge = Power: The right data and local insights are more important than ever. Lean on trusted real estate professionals who do their homework.
• Watch for Opportunity: “Frozen” markets almost always open hidden opportunities: a great house that just needs updating, sellers motivated by a job relocation, or a network of buyers who are just waiting for rates to dip a bit further.
• Stay Calm: Fluctuations are nothing new in real estate. The market moves in cycles, and whether you’re making your first move or your fifth, there’s always a path forward.

If you’re thinking about buying, selling, or just want to know what’s really happening in your Maryland neighborhood, the Sold by Lily Team at eXp Realty is here to help. No hype, just honest advice and actionable insights—personalized to your story.