A lot of people probably wish they could turn back the clock to 2018 or 2019. And in a sense, the Virginia real-estate market already has.
New data from the Virginia Realtors trade group suggest that the market – knocked higgledy-piggledy from its traditional norms by COVID – has returned to something akin to pre-pandemic behavior.
In sum: A market that had been hot-hot-hot from mid-2020 all through early 2022 continues to retreat, but not to freeze up.
“Sales activity in the commonwealth’s housing market has been cooling for 13 consecutive months now. This is largely due to mortgage rates doubling over the past year, causing many to delay their home search,” said Virginia Realtors chief economist Ryan Price. “We’ve been seeing fewer new sales contracts each month. Homes are taking longer to sell, and sellers, on average, are not getting their asking price.”
A total of 7,492 homes went to closing across the commonwealth in December, down 39 percent from a year before, with significant drops reported in all eight geographic areas of the commonwealth.
The biggest decline came in the broader Northern Virginia market, where sales were down 45 percent to 2,246. (In Virginia Realtors’ parlance, “Northern Virginia” includes not only the inner and outer suburbs of Washington, D.C., but also areas as far south as the Fredericksburg area.)
The median sales price statewide of $359,000 for the month was up 2.6 percent from a year before, although it was below the peak of the market last spring, when for several months median statewide (and national) prices topped $400,000.
Northern Virginia’s median sales price of $529,953 for the month was essentially unchanged. Among other reporting areas, central Virginia (including the Richmond area), Hampton Roads, the Shenandoah Valley and west-central Virginia showed year-over-year increases, while Southside and Southwest Virginia posted declines.
There are silver linings to every cloud (as well as clouds to every silver lining), and there is good news, particularly for buyers, as sales have cooled and inventory has begun to pile back up to more normal times.
In Virginia, there were 16,115 active listings on the market at the end of December. This is a supply jump of nearly 20 percent over the same time the previous year – largely due to homes lingering on the market longer rather than sellers dropping their homes into the inventory pool.
“We are still seeing fewer new listings coming on the market; however, Virginia’s inventories of available homes are, in fact, growing,” said Katrina Smith, president of Virginia Realtors. “The fact that homes are taking longer to sell is allowing the overall supply of active listings to build. Buyers may begin to see more options, not to mention less competition.”
Total statewide sales volume in December was about $3.3 billion, down 37 percent from a year before.
The question for the future becomes: What happens after the dormant winter period gives rise to spring, traditionally the make-or-break season for real estate?
There could be some good news, even though the number of pending sales in the pipeline at the end of December (5,210) was down 30 percent from a year before.
That’s good news? It is, as it represents a reduction in the year-over-year sales gap of preceding months. (Those December pending sales will likely translate into completed transactions in a month or two.)
Figures represent most, but not all, homes on the market. All December 2022 figures are preliminary and are subject to revision.