Heading into 2023, Montgomery County buyers walked into a market that had cooled off from the frenzy of 2021 but hadn’t turned into a buyer’s paradise either. Sales had slowed sharply over the previous eight or nine months, yet inventory stayed surprisingly flat because homeowners sitting on three percent mortgages had zero incentive to trade up into a six or seven percent rate. That combination meant buyers got some breathing room on average, price negotiation returned, inspection and financing contingencies came back, closing cost help reappeared, but the best homes in the best locations still triggered bidding wars like it was still 2021. Looking back at that year now is useful because it’s the clearest case study I have for how quickly a market can split into two different experiences depending on what you’re shopping for.

Why did home sales slow down while inventory stayed flat?

Buyers backed away first, and sellers simply didn’t follow. Once rates jumped from the historic lows of 2021 and early 2022 up into the six and seven percent range, a lot of would-be buyers hit pause, which showed up immediately in sales volume. What surprised people was that inventory didn’t rise to match the slowdown. Homeowners who had locked in a three percent rate had almost no financial reason to sell and buy again at double that rate, so they stayed put. That created an unusual standoff: fewer buyers active, but also fewer homes coming onto the market, which kept things from turning into the kind of buyer’s market people expected.

What did rates actually do in 2023?

Rates drifted, they didn’t collapse. Most forecasts going into the year called for a modest easing from the six and seven percent range, and that’s roughly what played out. Nobody serious was predicting a return to three percent money, and buyers who were financially qualified, meaning steady employment, solid income, real savings, and good credit, needed to accept that the ultra-low-rate era was over. Six to seven percent became the new normal, not a temporary detour. I saw this shift hit hardest with buyers who had been house hunting since 2021 and kept waiting for rates to snap back down. They didn’t, and the buyers who adjusted their expectations were the ones who actually closed on homes.

Did buyers get real negotiating power back?

Yes, price negotiation became the rule instead of the exception. During the pandemic run-up, bidding wars were standard and negotiating below list price was rare enough that it practically required something wrong with the house. In 2023, that flipped for a large share of listings. Buyers making offers below asking, especially on homes that had been sitting or that needed some updating, found sellers far more willing to talk. This was one of the clearest signs the market had normalized after two years of extreme seller leverage.

Were contingencies back on the table?

Yes, and this was a big one for buyer protection. For most of the pandemic it was nearly impossible to write an offer with a home inspection contingency, let alone a radon, appraisal, or financing contingency, because sellers had their pick of offers without them. In 2023 those standard safeguards came back for most transactions. That meant buyers could inspect a property, back out or renegotiate if something serious turned up, and protect their deposit if financing fell through, protections that had basically disappeared for two years straight.

Could buyers still get closing cost help?

Yes, and it mattered most for first-time buyers. Closing costs in Montgomery County typically run three to four percent of the sales price, on top of the down payment, which is a real cash crunch for buyers relying heavily on savings. In 2023, sellers became more willing to contribute toward those costs again. The catch was that buyers usually had to pick one lever or the other, either negotiate the price down or get closing cost assistance, but rarely both. On a $500,000 home, that might look like negotiating down to $485,000 for more equity and a lower payment but higher cash due at closing, or paying full price in exchange for $15,000 toward closing costs, which meant less equity but far less out-of-pocket cash. Neither option was universally better; it came down to whether a buyer was more cash-constrained or budget-constrained.

Did every home in Montgomery County sell the same way?

No, and this is the part buyers most often missed. 2023 was not a one-size-fits-all market. I compared it at the time to online dating: the most desirable listings still had plenty of competing interest no matter what the broader market data showed. A freshly listed home in a strong school district, in great condition, with high-end finishes and a good lot, still drew multiple offers and pushed buyers right back into 2021-style competition, price negotiation gone, contingencies waived, closing cost help off the table. I represented a buyer during that stretch who won a bidding war against eighteen other offers right in the middle of the holidays on exactly that kind of standout property. The lesson held throughout the year: average market conditions and the market for the best homes were two very different things, and buyers needed a strategy for both.

That split between the “average” market and the market for genuinely great homes is why national data only tells part of the story. TheNAR research and statisticshub is a good gut check on broader trends, but Montgomery County buyers need someone tracking the local, house-by-house reality alongside it. If you’re weighing a purchase now, ourguide to buying a homewalks through the process step by step, and ourstats pagebreaks down current local numbers so you can see where today’s market sits compared to 2023.

FAQ

Did home prices drop in Montgomery County in 2023?

Prices didn’t collapse, but negotiating room opened up on most listings outside the top tier, which effectively softened what buyers paid compared to the bidding-war years.

Was it a good time to buy in 2023?

For buyers with stable income and good credit who accepted six to seven percent as the new normal, yes, because contingencies, negotiation, and closing cost help all came back, giving buyers more protection and flexibility than they’d had in two years.

Why didn’t more homes come on the market if buyers had pulled back?

Homeowners with low pandemic-era mortgage rates had little financial incentive to sell and take on a much higher rate elsewhere, so inventory stayed tight even as buyer demand cooled.

Could buyers get both a lower price and closing cost assistance in 2023?

Rarely. Most sellers offered one concession or the other, not both, so buyers had to decide whether cash on hand or long-term equity mattered more to their situation.

Were the best homes still competitive in 2023?

Absolutely. Move-in ready homes in strong school districts and high-demand locations still drew multiple offers and often sold as if the market hadn’t shifted at all.

Every market has an “average” story and a “best homes” story, and the gap between them is where buyers either win or overpay. If you want a read on where Montgomery County stands today compared to 2023,reach out hereand let’s talk through your specific situation.

Ready to figure out your next move? 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:home buying guide;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.