Virginia Business: Tight housing markets continue in NoVa, Hampton Roads
Home sales, prices up in June, but inventory remains low
Home sales in Northern Virginia in June were up 3.6% from the previous month, but still down 16% compared with the same period a year ago, according to a report from the Northern Virginia Association of Realtors released Wednesday.
“Many factors” are pointing to the region’s market normalizing when comparing it to five-year trends, the report says.
“Homes continue to sell quickly, making sellers happy, and supply was up slightly compared to last month, which gave buyers a few more choices,” NVAR Board Member Casey Sutherland, a principal with Alexandria-based Rosemont Real Estate LLC, said in a statement. “The housing market is more rational than from the past few years, but many potential sellers remain sidelined, holding on to their better mortgage rates.”
The average home spent 13 days on the market in June, up 8.3% compared with June 2022 and consistent with May 2023. That’s getting closer to the five-year average for June at 15 days on the market. This is another sign that the market is moving back to more of a balanced state for buyers, NVAR says, though with sales still the below the 5-year average, the market remains competitive.
Inventory is also trending backward to the five-year average. The supply of inventory in June was 1.1 months, down 1.5% from June 2022, but close to the five-year June average of 1.2 months. That’s an increase over May 2023, when supply was 0.98 months of inventory.
Home prices continued to increase from June 2022 but leveled off from May 2023. The median sold price for a home in June 2023 was $717,999, up 4.9% from June 2022 and up 0.4% compared with May 2023.
“Our market has traditionally had less supply and stronger demand compared to many other housing markets, largely due to our healthy job market,” NVAR CEO Ryan McLaughlin said in a statement. “We expect demand will remain strong, favoring sellers but with a larger dose of normal that will give buyers a little more say.”
NVAR in June released a mid-year update to its NVAR Region 2023 Residential Real Estate Market Forecast. The forecast noted that a continued lack of housing inventory, soft demand creating a sellers’ market and favorable economic conditions tinged by mounting risks from inflation and other factors will lead to tighter inventories, sales declines and stable prices through the remainder of the year in the Northern Virginia market.
NVAR reports on home sales for Fairfax and Arlington counties as well as the cities of Alexandria, Fairfax and Falls Church and the towns of Vienna, Herndon and Clifton. According to NVAR:
The number of closed sales in June 2023 was 1,887 units.
The sold volume in June 2023 totaled more than $1.5 billion, a 12.8% decrease compared to June 2022 and up 6% compared to May 2023.
The average sales price in June 2023 was $813,101, an increase of 3% from June 2022 and an increase of 1.5% from May of 2023.
The number of active listings in June 2023 was 1,567, down 32.2% from June 2022 and below the five-year June average of 2,244 active listings.
The total number of pending sales in June 2023 was 1,522, a 25.9% decrease compared to June 2022.
HAMPTON ROADS
While homes are still selling quickly in Northern Virginia, median sales prices (MSP) in Hampton Roads set a record for the second straight month in June, according to the Real Estate Information Network.
In June, the MSP for homes across Hampton Roads reached $345,000, up from May’s MSP of $335,000.
June also saw increases in active listings and settled sales from the previous month, but active listings and settled sales are down significantly compared to June 2022.
“Seasonally, the month-over-month increases were expected, but they’re still important,” REIN Board of Directors President Jon McAchran, principal broker and co-founder of Virginia Beach-based AtCoastal Realty, said in a statement. “However, when we compare active listings and settled sales to last year, we’re still well below 2022 numbers, and inventory continues to be lower than where we need it to be for a healthy, balanced market.”
The months’ supply of inventory (MSI) for June was 1.47, a month-over-month increase of 1.37 in May, and year-over-year from 1.33 in June 2022.
“The MSI is up mainly due to slowing sales, which in itself is being impacted by a lack of inventory, causing price increases,” McAchran said.
REIN is the multiple listing service in Hampton Roads, with coverage from Williamsburg to Virginia Beach and extending to the North Carolina boarder. It includes more than 9,000 members and licensees, including brokers, agents, appraisers and other real estate professionals.
According to June data from REIN:
Active residential listings for June were 3,366, a 4.6% increase from 3,217 in May, but down 18.1% year-over-year from 4,114 in June 2022.
Pending sales stood at 2,517. That’s down 11.8% from 2,856 in May and down 15.5% from 3,074 year-over-year.
Settled sales during the month were 2,667. That’s a 6.6% increase from May, but down 19.7% from 3,320 in June 2022.
Median days on market for residential listings was 11, the same as in May and an increase from nine days in June 2022.
Residential new construction sales were 257, up from 252 in May and down from 292 from June 2022.
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