Virginia home-sellers in March received, on average, nearly 103 percent of original listing price for their properties, the highest ratio since the real-estate bubble of 15 years ago.
“Intense competition in the market continues to lead to multiple offers and offers over list,” said Ryan Price, chief economist for the Virginia Realtors trade group, parsing March sales data.
And it has been in the higher-end portions of the market, rather than entry-level, where competition has been the strongest. It is a trend “that has been persistent for several months,” Price said.
“The average sold-to-list-price ratio for homes that sold for $800,000 or more was 104.4 percent in March,” Price said. “On the other end of the market, homes that sold for $200,000 or less had an average sold-to-list-price ratio of 99.9 percent.”
In March, there were 11,446 homes sales across the commonwealth, up 40.3 percent from February (suggesting that seasonality has returned after the COVID disruption) but down 6 percent from a year ago, when the market was red-hot.
Inventory issues also are playing a role, with buyers at times unable to find anything they seek. That does seem to be easing somewhat, and the market could be impacted by spiraling home-mortgage interest rates.
“It is likely that Virginia’s inventory of homes for sale will expand over the coming months,” Virginia Realtors president Denise Ramey said. “Many sellers are feeling pressure from increasing mortgage rates, which will lead some to list their home now, before higher rates lead to less buyer interest.”
As of now, however, things keep moving along: The median sales price of $375,000 statewide was up nearly 12 percent from a year before, while total sales volume of $5.4 billion was up 5 percent.
Homes that went to closing in March spend an average of 24 days between listing and ratified sales contract, an improvement from the 31 days required a year before.
The scales still tip toward sellers, though. At the end of March, there was a 1.1-month supply of homes on the market, down from 1.8 months a year before. For a market to be considered truly balanced between buyers and sellers requires about three months’ worth of inventory in the market.
“Virginia’s housing market is still very competitive, and homes sold very quickly in March,” Price said. “Half of all homes sold in Virginia were sold in five days or less – in some local markets, the pace of home-sales activity was even more accelerated.”
The trade group expects that concerns about affordability and interest rates will intensify, but that the higher end of the market likely will get through it in better shape because the wealthier, in general, came through the pandemic in strong financial positions.
“However, competition will likely ease for higher-priced homes, and buyers will be less likely to offer tens, or even hundreds, of thousands of dollars over list,” Price said.
Figures represent most, but not all, homes on the market. All current figures are preliminary and are subject to revision.