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ArlingtonReal EstateInventory crunch continues in Va. homes market

Inventory crunch continues in Va. homes market

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More Virginians are putting their homes on the market, but they keep being snapped up so fast that inventory remains at anemic levels, according to new data.

Meanwhile, median sales prices continue to rise by double-digit figures, according to figures reported May 18 by the Virginia Realtors trade group.

There were a total of 13,413 home transactions reported across the commonwealth in April, up 32 percent from the COVID-impacted month of April 2020, the organization reported.


While the pandemic significantly skewed sales in April, May and a part of June last year, the April 2021 sales total was well above (by about 2,500 closed transactions) figures of Aprils in 2018 and 2019.

The median sales price of $355,643 was up 12.5 percent – nearly $40,000 – from a year before, as sellers continued to hold the upper hand in most parts of Virginia.

“Supply is very limited across local markets, although new listings are up,” said Lisa Sturtevant, chief economist for the trade group. She said the pace of activity qualified as “frenzied.”

Even taking into account the events of early 2020, which for coming months will scramble any meaningful year-over-year comparisons, “this year’s spring sales activity is busier than other recent typical spring sales seasons,” Sturtevant said, pointing to low inventory, low interest rates and the fact that many prospective purchasers have been able to cobble together down-payment cash while locked down.

Each of the eight corridors of the commonwealth showed higher sales – with increases ranging from 12 percent in Southwest Virginia to 83 percent in Eastern Virginia. Median sales prices also were up in a range of 4.7 percent (west-central Virginia) to 30.3 percent (Southwest Virginia).

Median prices ranged from $159,700 in Southside Virginia to $550,000 in Northern Virginia.

The number of new listings coming onto the Virginia market in April was 17,558, up about 10 percent from March and a sign that, so long as sellers have some place to move to, they’re willing to test the waters and see how much their current properties will bring.

But the total number of homes on the market (“active listings”) at the end of April was a relatively paltry 17,395, the equivalent of about 1.5 months’ worth of properties. That’s well below the 3 or 4 months required for a market to be considered balanced between buyers and sellers (anything more than 4 months would constitute a buyers’ market).

“While inventory expanded slightly this month, buyers still have very few options, and the market is still extremely competitive,” Sturtevant said.

Confirming the feeding frenzy is the fact that the median sales price for the month was more than 100 percent of median listing price. “In some counties and cities, competition is so fierce that prospective buyers are offering tens of thousands of dollars above list price,” Sturtevant said.
(The most caffeinated price range was $600,000 to $800,000, where the median sales price reached 103 percent of listing price.)

Last year, just over 21 percent of homes that sold in the commonwealth went to closing for $200,000 or less, but that figure has dwindled to just 15.5 percent of the total market. In contrast, the percentage of homes selling for $800,000 or more has ballooned from 6 percent to just under 10 percent in the same period, the biggest rise among any price group.

Adding up the sales and prices, the total sales volume for the month was $5.9 billion, up just under 52 percent from a year before.

Expect year-over-year sales comparisons between 2020 and 2021 to continue to be unrelentingly wide for the next few months; the number of pending sales in the pipeline at the end of the month was up 41 percent from a year before, again not much of a surprise given that the real-estate market took a major hit in spring 2020.

For the first four months of 2021, home sales totaled 42,995 statewide, up 24.4 percent from the same period in 2020, while median sales prices stood at $335,999, up 11.7 percent. Sales and median prices were up in each of the eight geographic corridors of the commonwealth.

Only seven of the commonwealth’s counties saw a year-over-year decline in median sales price for the first four months of the year. All were rural areas far downstate with the exception or Arlington.

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For more details, see the Website at www.virginiarealtors.org.

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