What you should know about new legislation, the market, and how to maximize your side of the deal
Like flowers peeking through the remaining winter frost and inching upward to spring skies, so too do we see more property listings pop up in the local real estate market. As the seasons shift, sellers and buyers seemingly become more active. With a busy real estate market forthcoming, we offer insights into what to expect, some statistics to keep in mind, new legislation, and tips for those on both sides of the deal. We recently discussed the state of the market with Maryland REALTORS® President Cheryl Abrams Davis and the association’s Director of Advocacy and Public Policy, Lisa May, to gain expert perspective and advice.
Legislative Updates
You may have heard about the recent National Association of REALTORS® (NAR) class-action settlement (originally filed by a group of Missouri homeowners in 2019) that resets how realtor commission fees are agreed upon and paid. NAR settled the lawsuit last year and agreed to the following nationwide rule changes: (1) Agents can no longer include the buyer agent’s compensation on multiple listing services (MLS); (2) Buyers can negotiate their own agents’ pay and formalize it in a signed contract; and (3) MLS participants working with buyers must enter into written agreements with their buyers.
If you haven’t sold or bought a property in Maryland within the past decade, then these changes will be brand new to you. But interestingly, prior to this settlement Maryland was one of 17 states that already had similar rules in place. Though Maryland established its buyer-broker agreement laws in 2016, the 2024 General Assembly and MD REALTORS® solidified clarification to the brokerage act with Senate Bill 542.
Under this bill, both buyer and seller brokerage agreements must clearly state the amount of compensation owed as a percentage, dollar amount, or both. In addition, buyers’ agreements must state who is obligated for payment, whether compensation can be sought from someone other than the client, and what actions entitle the broker to that compensation.
“But the big bill,” Lisa May says, “and the one Maryland REALTORS® supported as vital to addressing our state’s housing crisis, was House Bill 538, the Housing Expansion and Affordability Act.”
This bill establishes the following:
- Local zoning ordinances cannot prohibit manufactured or modular dwellings in areas designated for single-family residential uses.
- “Middle Housing” and “Cottage Cluster” are defined in state law for the first time.
- Former state properties and federal government military reservations can receive bonus density of 30 percent above the current maximum in exchange for dedicating as affordable 25 percent of the new units.
- Transit-oriented developments within 0.75 mi of a rail station can receive bonus density of 30 percent in exchange for dedicating 15 percent of new units as affordable.
- Lands owned by nonprofits may receive a 30 percent density bonus in exchange for dedicating 25 percent of the units as affordable.
- Local governments may not impose unreasonable restrictions or excessive public hearing requirements on the above projects.
According to May, “That bill alone accomplished more on housing than many previous sessions combined.”
Big picture-wise, what does this mean for the market? Cheryl Abrams Davis says, “We’re encouraged by the General Assembly’s willingness to tackle our housing crisis on a statewide basis. We’re beginning to see the awareness on the state level and in the Governor’s Office about the important role that housing plays in our economy and the ability to attract and retain our workforce.”
For this 2025 General Assembly, Davis is focusing on state-wide legislation that addresses “missing middle housing” as a stopgap to the housing inventory shortage. A well-known means to boost such inventory is Accessory Dwelling Units (ADUs).
“Accessory dwelling units are near and dear to me because, right now, we don’t have enough housing inventory in Maryland,” Davis says. “Missing middle housing is that housing, such as ADUs, that fill the gap until people are able to buy or to move or to rent. An ADU is either part of an existing property, such as a basement apartment, or it could be a room over a garage or a garage that was turned into a living space.
“Even though ADUs are in law in some counties in Maryland, there are several counties where it’s not allowed. We’re trying to get the ADU bill through on a state level.”
Market Activity
“One thing for sure is that the market is consistently changing,” Davis says. “Just when we get [last month’s] statistics, we’ve moved on to a whole other market.
“Back in October, things slowed down a little bit,” she explains. “Then toward the end of the year, sales picked up, which is very atypical for December or Q4. They picked up significantly. So, we were very excited to see that there was some momentum. Then, it seems we had a dry January in real estate.”
Overall, the state market saw the number of units sold in December increase 1.5 percent versus the year before. The average price of a house increased 5.8 percent over the prior year. The local median price is consistent with NAR statistics, which show that houses appreciate approximately 5 percent annually.
The pricing increase can also be attributed to the lack of inventory statewide. Despite homes selling, the actual inventory has been down; for example, 9,194 units were active in December ’24 compared to 10,543 in December ’23. And many homeowners who locked in the Pre-Covid low-interest mortgage rates in the 3–4 percent range have been less likely to re-enter the market with rates hovering between 6 and 7 percent.
But…“The reason why people buy and sell houses will never change,” Davis says. “At some point, everybody who has that 4 percent or less rate…they’re going to have to move. You have people who are moving up or down, getting a bigger house or a smaller house. First time homebuyers are always coming to the market. People are getting married, people are getting divorced, people are passing away, people will become widows, people are having families. Sometimes seniors can’t live alone, and they have to sell the house. So, because of all of those reasons that will never go away, at some point, those houses will come back on the market.”
Sellers’ Preparation
Preparing your home for sale can feel overwhelming. But there are more than a few best practices to consider when putting up the “For Sale” sign. We recommend consulting with a real estate agent well-versed in the local market, who knows the historic values, seasonal pricing fluctuations, local inventory and comparables, most-desired amenities, buyer demographics, and has contactor contacts in many home specialties that can help prepare a home for sale. Preparation can include minor-to-major home repairs, cosmetic enhancements, decluttering, interior staging, landscaping, and property inspections.
It can take quite a while to prepare a property for the market and any homeowner who doesn’t take the time to prepare is making a mistake. “Most buyers in our busy world don’t have time and/or vision to work on serious structural updates to their new purchase (kitchen, master bath, etc.),” states one local realtor. “The ‘options’ that help to sell a home are for the seller to offer clean, de-cluttered rooms in a setting that looks well-maintained.”
All the timing, preparation, and organization ultimately comes down to one thing…pricing. “The single most important factor in selling any home is to price it properly,” states another local realtor. “Introducing a home at an inflated price is almost always going to slow down your sale and result in settling for a price lower than you would have received if the house had been listed at the appropriate price going in.” This is a sentiment shared by every realtor we have surveyed for more than a decade.
Homeowners must take the emotion out of selling their home and realize the minute the house goes on the market, they are in a business transaction and should pay attention to the expert they have hired to help them sell. It is critically important to work with an agent who can assess the activity accurately for a home like yours or yours-to-be.
Buyers’ Preparation
If you’re entering the real estate market, you have a checklist of to-dos to accomplish, preferably before you begin searching for actual listings. First on the agenda. A meaningful discussion with those involved in the potential move/purchase—your spouse/significant other, children, parents, or even, just yourself. What type of home do you envision? What amenities are important to you? What does life look like five years down the road?
You’ll also need to evaluate your buying power and financing options. Shop the mortgage market for best rates and deals. Consult banks, lenders, and research homebuying programs at the Federal, State, and local levels.
“A lot of people are focused on the interest rate when they really should focus on what the payment is and if they really have to move,” Davis opines. “What is the purpose for the move? Everybody keeps talking about the ‘high’ interest rate. The interest rate is not high. The average interest rate since being tracked is 7.5 percent. We are still below the average. Buyers need to consult with professionals before they’re ready to go. Consult with the real estate professional in addition to the financial advisor and a lender.”
Once you have some numbers locked in and a pre-approval for a mortgage, the fun begins with reviewing listings and researching communities. You’ll also want to pay attention to a neighborhood’s infrastructure/connectivity (water/well, sewer/septic, electrical/gas, phone/cable/satellite) and physical property conditions (landscape, natural features/grade slope, proximity to water).
And while buying a home that is well maintained is always the gold standard, it is especially important and highly advisable to choose a home that already has the upgrades you may want. “People buy houses and then they’re house-poor because the house keeps nickel and diming them to death,” one realtor says with caution.
Our advice. Develop a relationship with a local real estate agent who knows the market and shows equal care and consideration in learning your wants and needs. Having the right team behind your purchase—from agent to lender to home contractors—can go a long way toward your forever home happiness. Ditto, for those on the other side of the deal, selling the dream.
Be sure to check out our Leading Real Estate & Home Professionals of 2025 here
