Virginia is beginning to see a shortage in residential housing, realtor group says

Virginia’s residential real estate market in the third quarter reflected an insufficient supply of homes versus demand, according to the Third Quarter 2017 Home Sales Report released Monday by the Virginia Realtors Association (VRA).

The number of sales from July 1 through Sept. 30 fell year-over-year, while prices continued to rise. Meanwhile, the time from list to closing shortened. The average number of days on the market dropped from prior year benchmarks to an average of 55 days for the 2017 third quarter, 10 percent lower than last year’s third quarter average (61 days).

“The prolonged shortage of inventory in Virginia’s market is clear in third quarter indicators,” VAR’s President Claire Forcier-Rowe said in a statement.  “Buyers are willing to pay more and close faster, but there simply aren’t enough houses to satisfy their demand.”

The third quarter saw 33,432 residential transactions closed, a decrease of 0.2 percent from the 33,493 units sold in the third quarter of 2016. While sales fell, the sum value of those transactions increased 3.2 percent from 2016’s third quarter volume to a total of $11.4 billion.

The rise in volume reflects steadily increasing median prices.  The aggregate median sales price for the third quarter was $280,000, an increase of 2.9 percent from the third quarter of 2016 ($272,000).

The report noted that annualized residential sales — a rolling sum of home sales closed in the preceding twelve months — fell for the first time in three years of reporting periods. Relative to the previous quarter, sales dropped 0.1 percent (to 120,847 from 120,786).

The drop in annualized sales is a clear indicator, VRA said, that limited supply has suppressed the number of transactions. The drop in third quarter 2017 sales pace was due specifically to a year-over-year decline in September sales, as July and August marginally outperformed their prior year marks.