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Tag: residential real estate

Fed’s Fifth District economy shrinks slightly

The economy in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) contracted slightly in recent weeks, according to the latest edition of the Federal Reserve’s Beige Book, released Wednesday.

Published eight times per year, the Beige Book is based on anecdotal information about economic conditions gathered from the 12 Federal Reserve Banks. It is compiled from reports by bank and branch directors, as well as information gathered from business contacts, economists, market experts and other sources. Wednesday’s release is an update from the Fed’s Sept. 6 report.

Here’s what the most recent Beige Book edition revealed about the direction the economy is taking:

Employment and wages in the Fifth District grew modestly over the previous few weeks. Companies reported continued trouble finding skilled workers, such as CDL drivers and motorcoach drivers. However, a staffing firm that specializes in executive-level marketers had too many candidates for the number of available jobs.

Prices continued to increase at an elevated rate, but growth was lower than this time last year. Manufacturers reported an unchanged growth in prices received and a slight increase in prices paid for nonlabor inputs. Services firms saw a marginal slowdown in prices received and a decline in nonlabor input prices. Labor costs for both continued to grow.

Manufacturers in the Fifth District reported mixed results, and several cited macroeconomic factors, like fears of a potential recession, as reasons for slowdowns. A gaskets manufacturer reported it was halting hiring, citing fears of a potential economic downturn. A fabric manufacturer said consumer demand declined because retailers had too much inventory, while a steel manufacturer reported strong demand during the same period.

Fifth District ports reported weak demand. Imports were lower both year-over-year and month-over-month, mainly because fewer consumer goods were coming into port. Export volume remained flat, however. Container dwell times returned to normal.

Trucking firm respondents said demand was flat this reporting period, but several trucking companies shut down, allowing carriers to slightly raise freight rates as they exited and reduced market capacity. Companies did not see the normal seasonal uptick this period.

Consumer spending in the district grew slightly, but spending growth varied by category. Food service, grocery stores and office supply stores reported steady or increased sales, while furniture, appliance and home remodeling and repair stores reported declining sales.

Travel and tourism activity slowed slightly this period, partly because of a typical seasonal shutdown and partly because of the threat of hurricanes in coastal destinations, according to respondents. Business travel picked up, helping to offset the reduced leisure travel.

Elevated prices, a lack of inventory and high mortgage rates constrained home sales in recent weeks, and the number of new listings in the Fifth District was down year-over-year. Days on the market increased slightly. Home prices held steady, although some were reduced for homes that had been on the market for more than 30 days.

Commercial real estate development and construction reduced significantly. The availability of credit and cost of capital were the main barriers to projects moving forward, as credit underwriting requirements tightened. Industrial and retail leasing demand continued to outstrip supply, escalating rents.

In the financial sector, loan demand continued to slow, primarily in consumer and commercial real estate portfolios. Banks struggled to maintain deposits.

Nonfinancial services providers reported stable demand and revenues. In terms of labor, applicant pools grew but remained under historical norms, and wage pressure continued.

Residential roller coaster

Last year began on a high note for the Hampton Roads residential real estate market, with home prices and apartment rents soaring. According to the Real Estate Information Network, monthly median rent costs rose 20.4% compared with 2021, with median rents of $1,800.

But by the fourth quarter of 2022, rent growth slowed and sales volume plummeted as the Federal Reserve raised interest rates to battle 40-year-record inflation rates.

Old Dominion University’s 2023 Hampton Roads Real Estate Market Review & Forecast, presented in March, noted that fourth-quarter rent growth was down to 5% in the region, compared with 11.6% for 2021’s fourth quarter. Paul Van, CEO and chief investment officer for Croatan Investments in Virginia Beach, said consumers’ economic health had declined, and the record high $755 million in multifamily sales in 2021’s fourth quarter plummeted 77% to $173 million in 2022’s fourth quarter.

Clark Simpson, senior vice president of Cushman & Wakefield | Thalhimer’s capital markets group in Virginia Beach, notes the effect on the market. “Last year, developers were more aggressive buying land because construction loans had lower rates and rent growth was solid,” but that’s slowed, he says, because of higher interest rates and construction costs, as well as concerns over the rate of rent growth.

By early summer, the region’s homebuying market righted itself, with median sales prices setting records in May and June, at $335,000 and $345,000 respectively, according to REIN, and Virginia Realtors reported in May that multifamily inventory rose by 1.4% in the first quarter of 2023, with the average monthly rent payment rising by $56.

While the higher cost of housing is not great for buyers or renters, the whole Hampton Roads region is not a monolith, notes Alvin “AJ” Abston, a senior market analyst for Washington, D.C.-based CoStar Group, which collects and analyzes real estate data. Micro-economies among the region’s localities were affected by inflation differently. 

With regard to rentals, Virginia Beach, with a population of almost 457,700, “has been able to absorb the extra level of inventory” and has 5.6% vacancy, he says. Suffolk, on the other hand, with a population of 96,000, “has vacancy in the double digits. It’s a smaller market, so impacts are seen a lot quicker.” The submarket of Chesapeake is seeing an influx of residents, he adds. “More people are moving in who have been priced out of other areas.”

Demand is high in the affordable housing market, notes Christine Gustafson, vice president of marketing and public relations for The Breeden Co., which is redeveloping Tidewater Gardens in Norfolk. The project replaces 618 aging units, built in the 1950s, with 714 units.

“We can’t build fast enough,” she says. Breeden is also involved in The Lift & Rise in Newport News, part of the Marshall-Ridley Neighborhood Transformation Plan. The community includes a mix of 81 affordable and market-rate apartments, with rents ranging from $968 for one bedroom units to $2,250 for three bedrooms.

Breeden also has been busy at the other end of the market spectrum with the Lofts at Front Street, a luxury 258-unit building in downtown Norfolk on the Elizabeth River, with rents ranging from $1,740 to $2,685. This apartment community and others reflect customer demand, such as “Zoom rooms or coworking spaces,” Gustafson says. “What may have been a billiard table will now be a work table where people can work and meet.”

Thalhimer’s big project last year, Simpson says, was the April 2022 sale of Smitty’s Mobile Home Park in Norfolk for $9.75 million. The buyer, Bonaventure, a real estate developer in Alexandria, plans to build a 418-unit apartment and townhome complex, replacing 100 mobile homes.

“They’re Class A apartments. It will really improve that corridor,” he says. 

 

August NoVa home price growth outpaces national rate

Home prices grew faster in Northern Virginia than nationally in August, according to a Northern Virginia Association of Realtors report released Monday.

The Northern Virginia market also had lower inventory than the nationwide market, but sales declined in both markets.

“Despite mortgage rate increases, demand for housing is outstripping available options in our region. Low inventory is much more pronounced in our region than nationally and is driving up prices,” NVAR CEO Ryan McLaughlin said in a statement.

The median sold price in Northern Virginia was $700,000 last month, up 11.6% from August 2022. The national median home price also rose, to $407,100, a 3.9% increase from August 2022.

Northern Virginia home sales last month dropped 12.4% from August 2022, but nationally, home sales fell 15.3%. In the region, properties stayed on the market for an average of 17 days, two days less than in August 2022, while across the U.S., properties remained on the market for 20 days, four days more than in August 2022.

Northern Virginia had a 1.08-month supply of inventory in August, down 1.4% from last year. Nationwide, the residential market had a 3.3-month supply of inventory, up from 3.2 months in August 2022.

NVAR reports home sales activity for Fairfax and Arlington counties, the cities of Alexandria, Fairfax and Falls Church, and the towns of Vienna, Herndon and Clifton.

NoVa home prices increase, Hampton Roads sees inventory boost

Median home prices in Northern Virginia continue to increase, hitting $700,000 in August, an 11.6% percent increase over the previous year, according to the latest report from the Northern Virginia Association of Realtors.

At the same time, year-over-year sales declined, decreasing 12.4% from August 2022, but month-over-month sales increased as the summer reaches its end. In July, 1,444 units sold compared to the 1,535 sold in August.

“Finding a home to buy remained challenging in August with limited options and higher prices, but we are seeing positive signs, including a less drastic drop in home sales,” NVAR Board Member Stacy Holscher, a real estate agent for Redfin, said in a statement. “It’s important that homebuyers are prepared so they can make quick and appropriate decisions, including getting pre-approved for a mortgage, knowing what they want and working with a professional to help navigate the process.”

The average home stayed on the market 17 days in August, two days longer than in July and two days less than in August 2022. Inventory also remained tight, with 1.08 month’s supply, down 1.4% from August 2022 and also down from the five-year average of 1.2 months of inventory.

The tight supply pushed prices even higher as the median selling price for a home in August reached $700,000, an increase from July, when prices hit $691,000.

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 sold volume in August was $1,270,936,173, up 0.6% compared to August 2022 and slightly up compared to July, when the sold volume was $1,151,230,998.
  • The average sold price for a home in August was $831,968, an increase of 15.8% from August 2022 and up from July, when the average sold price was $806,574.
  • The number of active listings in August was 1,492, a 30.7% decrease compared to August 2022.
  • The total number of new pending sales in August was 1,304, a 16.7% decrease compared to August 2022.

HAMPTON ROADS

House prices also remain high in Hampton Roads, and the number of homes listed for sale reached its highest point of the year in August, according to the Real Estate Information Network, the multiple listing service for the region.

The median sale price of homes sold during August was $341,100. That’s up slightly from $340,000 in July, and up 7.95% from $315,990 in August 2022, but a decrease from June, when MSP for homes across Hampton Roads hit a record $345,000. Active residential listings for August were 3,680, up 6.6% from 3,452 in July, but down 10.6% year-over-year from August 2022.

“There are a lot of factors that impact the local housing market, not the least of which is available inventory,” REIN Board of Directors President Jon McAchran, principal broker and co-founder of Virginia Beach-based AtCoastal Realty, said in a statement. “Likewise, the median sales price is still near the record set in June, and mortgage rates remain stubbornly high.” 

The month’s supply of inventory also reached its highest point since October 2020, at 1.68, according to REIN. That’s an increase over July, when the MSI hit 1.54, and also a jump from 1.39 in August 2022. Homes spent a median 14 days on the market in August, up two days compared to July but a decrease of one day when compared to the same month in 2022.

“Despite current mortgage rates and a somewhat limited number of properties for sale, people are still willing to buy when the right home comes along,” said McAchran. “If inventory continues to rise, it will level off prices. However, we’re still historically low, and we don’t anticipate anything drastic.” 

REIN covers an area from Williamsburg to Virginia Beach and extends to the North Carolina border. It includes more than 9,000 members and licensees, including brokers, agents, appraisers and other real estate professionals. 

According to August data from REIN:

  • Pending sales stood at 2,289, a 1.06% month-over-month increase compared to 2,265 in July, but down year-over-year by 15.66%.
  • Settled sales during the month were 2,478. That’s up 6.99% when compared to July’s 2,316, but down 17.15% compared to 2,991 last August.
  • Residential new construction sold in August was 249, compared to 202 in July and 285 in August 2022.

Real Estate 2023: TERRIE L. SUIT

When Suit started her career, she worked for a builder, then became a Realtor and later a mortgage loan officer. Today, after serving as the state’s first secretary of Veterans Affairs and Homeland Security, as well as a Republican state delegate for eight years, Suit now leads Virginia’s largest trade association. She advocates for 38,000 Realtors across the state for an association that also produces research and provides continuing education opportunities for its members.

When her husband, a Navy Seal, was transferred to Virginia, Suit wanted to finish college but, faced with paying out-of-state tuition, she could afford only one class a semester. So, she ran for the state legislature with a goal of making in-state tuition available for military dependents.

Suit earned an MBA from the University of Mary Washington, for which she serves on its board of visitors. She also has chaired multiple committees for the National Association of Realtors.

TRAIT(S) I ADMIRE: Attentiveness. Being able to really pay attention to the person you are talking with in the moment and to give them your full attention and sincerely care about what the person is sharing.

Real Estate 2023: EUGENE J. BREDOW

In March 2022, Bredow was appointed president and CEO of NVR after Paul C. Saville transitioned to executive chairman. Bredow has worked for NVR since 2004 and became president of NVR Mortgage in April 2019 after holding several executive positions in accounting and administration.

Founded in 1980, NVR is one of the nation’s largest homebuilding and mortgage banking companies. NVR reported $10.5 billion in 2022 revenue, up 18% from the $8.95 billion reported in 2021. Its homebuilding segment is the nation’s fourth largest builder, operating under the Ryan Homes, NVHomes and Heartland Homes brands in 35 metro areas across 15 states and Washington, D.C. Its mortgage and settlement subsidiaries provide an array of financing and settlement and title services to complement its homebuilding business.

Bredow is a graduate of the University of Maryland Robert H. Smith School of Business and serves as a member of its board of advisers.

Real Estate 2023: BARBARA M. WOLCOTT

A five-decade Hampton Roads real estate veteran, Wolcott now leads a company created by the merger this March of Rose & Womble Realty and Berkshire Hathaway HomeServices Towne Realty. The combined firm has more than 750 agents and the backing of Suffolk-based TowneBank, as well as being part of Warren Buffett’s Berkshire Hathaway luxury real estate franchise network.

According to the firm’s executive board chairman, J. Van Rose Jr., the new company represents more than 16% of the Hampton Roads residential market, and it plans to expand into Richmond and North Carolina.

Wolcott serves on the Real Estate Information Network board, which governs the multiple listing service for the Hampton Roads region, and TowneBank’s Virginia Beach regional advisory board. She received a lifetime achievement award from the Hampton Roads Realtors Association in 2019, after having served as president of Virginia Realtors and on several committees with the National Association of Realtors.

Real Estate 2023: LISA CHANDLER

In March, Berkshire Hathaway HomeServices and Rose & Womble Realty announced their merger. The combined agency has more than 750 agents and represents over 16% of the region’s market share, according to its chairman, J. Van Rose Jr.

After an early childhood spent moving around the globe with her Air Force officer father, Chandler landed in Norfolk in 1973. In 1991, she joined the realty company started by her mother-in-law, Nancy Chandler, serving as its executive vice president. After Rose & Womble and Nancy Chandler Associates merged in July 2019, Chandler served as principal broker of Rose & Womble Chandler Property Management.

With a self-proclaimed passion for volunteering, Chandler chairs the Old Dominion University Real Estate Foundation’s board. She is also a member of the board of directors for the Virginia Arts Festival’s board of directors and the Real Estate Information Network’s 2023 Property Management Advisory Committee.

Chandler graduated in 1976 from Old Dominion University with a bachelor’s degree in environmental health.

Real Estate 2023: ALBERT G. ‘BEAU’ VAN METRE JR.

Van Metre’s late father founded his family real estate development company in 1955, partnering with B.B. Wills to build the first Van Metre Homes in Burke, a Fairfax County suburb. Like Northern Virginia, Van Metre Cos. has grown exponentially in the decades since.

Beau Van Metre joined the company in 1963. In 2002, he was appointed vice chairman and he became chairman in 2008. Ashburn-based Van Metre Homes, one of the company’s subsidiaries, was named Pro Builder magazine’s 2022 Builder of the Year. Van Metre Cos. owns and manages more than 1 million square feet of commercial space in Northern Virginia, and it has a design and build group and a mortgage division.

He also is a trustee for the Van Metre Family Trusts and runs the Van Metre Family Foundation with his sister, Alison Van Metre Paley. Their family foundation has made more than $4.4 million in donations to charitable organizations ranging from the Children’s National Health System to Loudoun County-based Women Giving Back.

Well-known in the yacht racing world for winning the 1976 Newport Bermuda Race with his father, Beau Van Metre also won last year’s New York Yacht Club Regatta.

Real Estate 2023: PATRICK BAIN

Promoted to president and CEO in March, Bain first joined The Long & Foster Cos. in 2010 as president of its insurance and home warranty businesses. In 2018, he took on oversight of Long & Foster Property Management and Long & Foster Rental Service Center. He rebranded the property management business to HomeServices Property Management last year, and in 2021, Bain started Insight Home Inspections, which launched in early 2022.

Bain earned his bachelor’s degree in economics from Allegheny College. Prior to joining Long & Foster, Bain served as vice president and general manager for Pittsburgh-based Howard Hanna Insurance Services. He founded internet insurance startup InsRateDirect.com in 1998 and was managing partner at the McDonnell Bain Group. He negotiated both companies’ sales to larger insurance companies in 2002.

Berkshire Hathaway affiliate HomeServices of America acquired Long & Foster in 2017. Founded in 1968, Long & Foster has more than 200 offices and more than 9,000 real estate agents. Its family of real estate companies includes Long & Foster Real Estate, Prosperity Home Mortgage, Long & Foster Insurance and Urban Pace. In July, the company moved its headquarters within Chantilly, citing the new building’s “open and collaborative workspaces.”