No, the Montgomery County housing market did not crash in 2023. I said it heading into that year and the data backed it up: sales volume dropped hard, but home inventory stayed too low for prices to collapse. That distinction — falling sales versus falling prices — is the whole story, and it’s one I still point back to whenever a client asks me if “the crash” is finally coming. This is a look back at the numbers I was watching at the end of 2022, why they pointed away from a crash, and why that same math still matters today.
Why Did People Think A Crash Was Coming?
People expected a crash because 2022 delivered the fastest interest rate shock in decades. We started January 2022 with mortgage rates sitting in the 3% range — historic lows left over from the pandemic years. By the back half of the year, rates had climbed to their highest point in roughly 20 years. That kind of whiplash rattles buyers, sellers, and agents alike. When borrowing costs double in under twelve months, it’s natural to assume the whole market is about to come apart. I got the “is it going to crash” question constantly, which is exactly why I sat down and ran the actual numbers instead of guessing.
What Did The Year-Over-Year Sales Numbers Show?
The year-over-year numbers showed a real slowdown, not a collapse. Comparing full-year 2022 to full-year 2021, units sold in Montgomery County were down 21%, and total sold dollar volume was down 16%. Zoom into November 2022 versus November 2021 specifically and it looks even sharper: units sold dropped 38%, and dollar volume fell 32%. Home inventory, meanwhile, was up about 10% year over year. On the surface, that combination — sales cratering while inventory climbed — reads like the start of a downturn. But raw sales figures only tell half the story. You have to weigh them against how much inventory is actually sitting on the market.
What Does The Absorption Rate Actually Measure?
The absorption rate measures how long it would take to sell off all current inventory at the existing sales pace, and it’s the number that separates a slowdown from a crash. As of November 30, 2022, there were 1,016 homes on the market in Montgomery County, and 770 homes sold during that month. Divide inventory by monthly sales — 1,016 ÷ 770 — and you get a ratio of 1.32. That translates to about 1.3 months, or roughly five weeks, of supply. A year earlier, in November 2021, that ratio was 0.75, or about three weeks of supply. Supply had grown, no question. But five weeks of inventory is nowhere close to what a genuine buyer’s market looks like.
How Much Inventory Actually Signals A Buyer’s Market?
Most housing economists consider three months of inventory the tipping point into a balanced market, and four months or more signals a buyer’s market. Anything under three months still favors sellers. At five to six weeks of supply, Montgomery County was still firmly in seller’s-market territory heading into 2023 — even with sales volume down double digits. That’s the piece that gets lost when people only look at the “sales are down 38%” headline. Falling transaction counts don’t automatically mean falling prices. What actually drives price direction is the ratio between what’s for sale and how fast it’s moving, and that ratio never got anywhere near crash conditions.
Why Did Inventory Stay So Low Despite Higher Rates?
Inventory stayed low because of what’s known as the lock-in effect. A huge share of Montgomery County homeowners had locked in 3% mortgage rates during 2020 and 2021. Once rates jumped to 6-7%, those homeowners had almost no financial incentive to sell and move across town into a much higher payment. So instead of listing, they stayed put. That single behavioral shift is a big part of why inventory never spiked the way some expected — and why a true crash, which requires a flood of forced or panicked selling, never materialized. For a broader statistical view of how this played out nationally, the National Association of Realtors’research and statistics hubis worth bookmarking.
What Did This Mean For Buyers And Sellers Heading Into 2023?
This meant buyers finally got some room to negotiate, while sellers who wanted top dollar had to actually earn it. After two years where buyers waived inspections and bid over asking just to compete, 2023 buyers could negotiate on price, terms, and contingencies in a way that simply hadn’t been possible in 2020 or 2021. That said, well-priced, move-in-ready homes in strong school districts and desirable lots — what I call “unicorn” listings — still drew serious competition. The properties that sat and took price cuts were the average-to-below-average condition homes that needed work and weren’t priced to reflect that. The market didn’t stop rewarding quality. It just stopped rewarding mediocrity priced like quality.
If you’re weighing a purchase or sale in this environment, ourguide to buying a homewalks through how to position yourself either way, and our currentmarket stats pagetracks these same inventory and absorption numbers in real time.
Frequently Asked Questions
Did Montgomery County home prices actually drop in 2023?
Prices softened from the unsustainable pace of 2021 and early 2022, but low inventory kept the market from any broad price collapse. Well-priced, well-maintained homes held their value.
What is a healthy amount of housing inventory?
Most experts consider roughly three months of supply balanced. Under three months favors sellers; four months or more shifts leverage to buyers.
Why didn’t more homeowners sell when rates went up?
The lock-in effect. Homeowners sitting on 3% mortgages had little reason to sell and take on a 6-7% rate on their next home, so many chose to stay put instead.
Is now a good time to buy in Montgomery County?
It depends on the property and your timeline, but reduced bidding-war pressure has made room for real negotiation on price and contingencies compared to 2020-2022.
How can I get a read on today’s Montgomery County market?
Reach out directly and I’ll walk you through current inventory, absorption rate, and pricing strategy for your specific situation.
This is exactly the kind of look-back that keeps me grounded when new headlines start shouting “crash.” The data, not the noise, tells you where the market actually stands. If you want a straight read on what’s happening right now in Montgomery County,contact me directly— I’ll break it down the same way, no spin either direction.
Ready to talk strategy? Book a free 30-minute call with me here.
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Sources and next steps
Verified local sources:Maryland REALTORS housing statistics;GCAAR housing market reports;FRED 30-year mortgage rate series;Maryland SDAT real property search.
Related Kevin guides:market stats;relocation guide;book a call.
Watch the YouTube videoorbook a 30-minute strategy call with Kevin.
Expanded local research sources:GCAAR housing market reports;Maryland REALTORS housing statistics;Realtor.com Montgomery County market data;FRED 30-year mortgage rates;Maryland SDAT real property search;Zillow Montgomery County home values;Montgomery Planning development;Montgomery Planning development review;MCATLAS zoning map;Montgomery Planning data catalog;Montgomery County permits;Visit Montgomery travel guide;Visit Montgomery restaurant directory;Tripadvisor Montgomery County things to do.
Contextual links for this video
Kevin site links:home selling guide;home buying guide;market stats;DMV Housing Market 2026: Is a Crash Coming or Are the Numbers Telling a Different Story?;Zillow Just Banned Private Listings — Here’s What Home Buyers and Sellers Actually Need to Know.
Outside research links for this video:GCAAR housing market reports;Maryland REALTORS housing stats;Realtor.com Montgomery County market data;Reddit discussion search for this topic;Google context search for this video.
Kevin process link: why Kevin’s local process matters.