In the spring of 2023, Montgomery County’s housing market looked like a contradiction on paper. Closed sales through April were down about a third compared to the year before, which sounds like a market cooling off. But the real driver wasn’t fading demand — it was a shrinking supply of homes for sale. Inventory had dropped roughly 14% year-over-year, and just three months earlier, in February, the county actually had 40% more listings than the same month in 2022. That swing happened fast, and it changed the entire dynamic for buyers and sellers heading into the spring season. Homes that did hit the market were, on average, selling above asking price. This piece is a snapshot of that moment — the numbers, the reasons behind them, and what they meant if you were trying to buy or sell a home in Montgomery County at the time.

Why did home sales drop 32% in Montgomery County?

Sales were down because there were fewer homes to buy, not because buyers disappeared. Through April 2023, year-to-date closed sales in Montgomery County were down about 32% compared to the same stretch in 2022. On the surface, that number invites an easy explanation: rising interest rates scared buyers off. I want to be clear that wasn’t the real story. Buyer demand stayed strong. What changed was the supply side — there simply weren’t enough listings to fuel the same volume of transactions. When you have fewer homes hitting the market, you get fewer closings, even if every single one of those listings gets multiple offers. That’s exactly what was happening.

Why was housing inventory disappearing so fast?

Inventory was vanishing because homeowners had no financial incentive to sell. As of the end of April 2023, active inventory in Montgomery County was down about 14% from a year prior. That number understates how quickly things moved, though. Rewind just 90 days to February 2023, and the county actually had 40% more inventory than it did in February 2022. Going from a 40% surplus to a 14% deficit in three months is a massive shift, and it comes down to one simple fact: roughly 80% of homeowners in the U.S. with a mortgage were locked into a fixed rate of 4% or lower, with some as low as 2.5%. Asking those owners to sell, buy something new, and trade a 3% rate for a 6.5% rate month after month just didn’t pencil out for most people. As a result, new listings were running 35-40% behind the prior year, month after month.

Who was actually selling homes in Montgomery County?

The sellers who were active in early 2023 were, for the most part, sellers who had no choice. Looking back at the transactions my team closed year-to-date, the common threads were relocation, death in the family, or landlords cashing out once a lease expired. These are situations where selling isn’t optional — life circumstances force the decision regardless of what mortgage rate the seller is walking away from. Discretionary sellers, the ones who could simply choose to stay put and keep their low rate, were largely sitting on the sidelines. That’s a meaningful shift from a typical market, where a good chunk of listings come from people who decide it’s simply time to move.

Were home prices still rising despite fewer sales?

Yes — prices were climbing even as the number of transactions fell. While unit sales were down 32%, the average sold price in Montgomery County was up about 4% year-over-year. Homes were also selling for roughly 100.2% of list price on average, meaning most properties were closing above their original asking price. That combination — fewer sales, higher prices, over-asking closings — is the clearest evidence that this was a supply problem, not a demand problem. If demand had genuinely dried up, prices would have softened and homes would have lingered. Instead, competition for the homes that did come to market was intense. Some of the properties my team sold that spring drew three or four competing offers. One listing brought in 29 separate offers. I’ve compared it to a game of musical chairs — there were far more buyers standing than there were chairs (homes) to sit in, and not everyone was going home with a seat.

What did this market mean for buyers in spring 2023?

For buyers, the message was straightforward: the inventory shortage wasn’t a short-term blip, and waiting for it to ease came with real risk. With supply this constrained, values were positioned to keep climbing, not fall. My advice to buyers at the time was to act sooner rather than later if they found a home that fit their needs. There’s an old saying in real estate — date the rate, marry the house. It’s a cliché, but there’s truth in it: if you find a property you genuinely want to own, lock in the price and the rate now. Rates fluctuate, and if they come down the road and it makes financial sense, refinancing is always an option later. Waiting on the hope that rates will drop isn’t a strategy — it’s a bet with no guaranteed payoff, and meanwhile home values keep moving upward.

What did this market mean for sellers in spring 2023?

For most sellers, there wasn’t a strong reason to list unless circumstances required it. Given how favorable low fixed rates were for existing homeowners, there wasn’t much incentive to sell without a real need to move. The one group I was actively encouraging to think differently were empty nesters — homeowners looking to downsize who didn’t need to stay in a larger property. For that group, spring 2023 was a strong window to sell while demand and pricing were both working in their favor, since there was no guarantee that conditions would remain this seller-friendly indefinitely.

FAQ

Was the Spring 2023 Montgomery County market a buyer’s market or seller’s market?

It leaned seller’s market. Low inventory and strong buyer competition pushed average sold prices above asking, even though overall transaction volume was down.

Did high interest rates cause the drop in home sales?

Not primarily. The bigger factor was low inventory — homeowners with low fixed-rate mortgages had little incentive to sell and take on a much higher rate elsewhere.

Were multiple-offer situations common in Montgomery County at the time?

Yes. Many listings drew three or more competing offers, and at least one property in this snapshot received 29 offers.

Should buyers have waited for interest rates to drop in 2023?

Based on the conditions at the time, waiting carried risk since values were expected to keep rising with no guarantee rates would fall. Buying a home you loved and refinancing later if rates dropped was the more common approach.

Where can I see current, up-to-date Montgomery County market stats?

Check my live local market stats page atmarket stats, and see national context fromNAR’s research and statistics.

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Real estate moves fast, and this snapshot reflects a specific moment in Montgomery County’s history — spring 2023. Market conditions have shifted since, and if you want the current picture or want to talk through your own buying or selling plans, I’m here to help.

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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.

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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.