Va. housing market sees sharp drop in sales

The housing market is cooling off, compared to a year ago.

Home sales in Virginia dropped by nearly 19% in June, compared to sales in June 2021, the sharpest drop in the housing market since the beginning of the pandemic, Virginia Realtors reported Friday.

In June, 13,324 homes were sold in Virginia, which is 3,208 fewer sales than the same time last year. At the end of June, there were 19,375 active listings, nearly 200 more than this time last year. It’s the first time inventory has expanded in Virginia’s market in more than seven years, according to Virginia Realtors.

Activity was up about 2% in June, compared to May, which is lower than typical May to June jumps, the report said.

“The slowdown we’re seeing in sales is due to more buyers pressing ‘pause’ on their home search,” Virginia Realtors President Denise Ramey said in a statement. “The lack of inventory paired with the rise in interest rates have created a more challenging environment for home buyers.”

The slowdown is widespread across Virginia, and about three-quarters of local markets have had fewer sales so far in 2022 compared to 2021. The largest declines are in the Shenandoah Valley, coastal communities, Northern Neck and the Eastern Shore, as well as suburban areas of Richmond and parts of Northern Virginia, according to the report.

However, the largest supply growth is the Shenandoah Valley, outer suburban communities in Northern Virginia and the New River Valley.

There are fewer new listings on the market compared to last year, an 11.5% decline. For 10 months straight, the number of new listings has declined when compared to the prior year. But the number of active listings has increased slightly, about 1% over a year ago. Between May and June, active listings swelled by 2,500, a 14.8% increase.

The median home price in Virginia is $397.315, nearly 7% higher than in the same time period last year. The median price is about $25,000 higher than a year ago. But when comparing median home price month-to-month, it has gone down about 1% since May.

It’s still a competitive market for buyers, with pressure remaining to pay higher than the asking price. The average sold-to-list price ratio was 102.4% in June, lower than last month but higher than in June 2021. Homes sold for more than $800,000 have been selling for 2.9% above the list price on average, and homes in the $600,001 to $800,000 range went for 2.8% above the list price on average. However, the list price is not as high as it was in the past few months, which Virginia Realtors says signals easing pressure on home prices.

The number of days a house is on the market is still competitive, with 18 days as the average, three days faster than June 2021. Higher-priced homes sold the fastest, but they sold quickly across all price points.

The wildcard in looking at the housing market is inflation, with mortgage rates rising.