The national real-estate market appears to be standing on the edge of a cliff staring over the precipice, but Virginia sellers continue to reap the rewards of a still somewhat pro-seller environment.
In fact, the median home-sales price for properties that sold in the Old Dominion in May for the first time ever topped $400,000. The final tally of $401,082 was up 8.7 percent from a year before and up more than $106,000 from the median sales price of $295,000 recorded just four years ago, according to figures reported by the Virginia Realtors trade group.
But headwinds are gathering.
“Buyers are feeling the weight of surging home prices, high inflation, mortgage-rate jumps and an extremely competitive market with few options to choose from,” said Ryan Price, chief economist of Virginia Realtors.
Still, there does not seem to be a sense of panic among professionals.
“Because the state’s inventory is so low and demand remains relatively strong, we do not expect that Virginia home prices will fall,” said Denise Ramey, president of Virginia Realtors. “The price growth will likely moderate from the rapid pace of the last couple of years, as interest rates continue climbing, pushing more buyers on the sidelines.”
Sales statewide in May totaled 13,047, a drop of 8.7 percent from the 14,298 properties that went to closing in May 2021. Outside of the Shenandoah Valley, which saw a very slight uptick (from 680 to 685), home sales were down in every area of the commonwealth, and down by double digits in Northern Virginia and the eastern portion of the state.
Inventory has been a key driver of the lower sales over the past year, and remains below 2021 – there were 16,875 properties on the market at the end of May, down from 17,868 a year before. But that spread of just 5.6 percent is the smallest in three years, and the increase of 9 percent of active listings between April and May was higher than the typical seasonal bump.
That suggests that some sellers may have rushed to get their homes on the market while sellers were jumping at whatever was available – something that seems to have dissipated in recent weeks.
The market, however, remains in pro-seller territory, at least based on recent sales performance. At the end of May, there was a 1.2-month supply of homes listed for sale, down from 1.4 months a year before. It would take a more than doubling of that rate for the market to move into a balance between buyers and sellers.
Homeowners whose properties went to closing in May – whose transactions largely were consummated in late March or April – received, on average, 103.3 percent of listing price. But in the intervening period, mortgage-interest rates have continued to rise from the historically low rates throughout much of the pandemic.
In addition to median sales prices being up 8.7 statewide, they rose to new heights in many geographic areas of the commonwealth:
• Up 9.1 percent to $611,000 in Northern Virginia.
• Up 15.4 percent to $375,000 in Central Virginia.
• Up 12.1 percent to $325,000 in Hampton Roads.
• Up 13.8 percent to $321,000 in Eastern Virginia.
• Up 11.1 percent to $300,000 in the Shenandoah Valley.
• Up 11.2 percent to $265,750 in West Central Virginia.
• Up 15.4 percent to $195,000 in Southwest Virginia.
• Up 23.6 percent to $189,000 in Southside Virginia.
(How the statewide median could be up just 8.7 percent when the lowest regional increase was 9.1 percent is for the mathematician in us to explain: There were fewer sales in higher-priced localities like Northern Virginia for the month, which held the statewide median increase back, even as all components of the index showed healthy increases.)
Add up the sales and prices, and total sales volume for the month was $6.6 billion, up slightly from a year ago.
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For full details, see the Website at www.virginiarealtors.org.