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Tag: residential real estate

NoVa housing forecast: sellers’ market to continue

Northern Virginia’s housing market will likely remain a sellers’ market for the rest of 2023, according to a Northern Virginia Association of Realtors market forecast released June 6.

NVAR and George Mason University’s Center for Regional Analysis predict a continuing housing inventory shortage and pent-up demand from buyers amid positive economic conditions but mounting risks.

“Higher interest rates are impacting both buyers and sellers, causing housing inventories to be even tighter than during the pandemic, but with slightly softer demand pressures,” NVAR CEO Ryan McLaughlin said in a statement.

Mortgage rates have receded from recent highs but remain higher than pre-pandemic rates. For the week ending June 8, the average 30-year fixed-rate mortgage rate was 6.71%, the first decline after a three-week climb, according to Freddie Mac data. While pricing remains strong, low housing inventory has decreased the number of units sold by about 20% from pre-pandemic norms.

GMU’s Center for Regional Analysis and industry experts predict that demand in Northern Virginia will remain soft compared with the last two years because some households are priced out of the market by higher mortgage rates. However, there is pent-up housing demand, and buyers seem to be accepting higher mortgage rates, especially since monthly rent rates are also increasing.

The forecast expects existing housing inventory shortages to increase, as current homeowners are less likely to move if they locked in lower mortgage rates. On average, the report predicts unit sales will decline from about 10% to 15%, compared with 2022.

“It will be hard to justify leaving a home with a refinanced loan below 3% for another home with a higher price and a loan rate that could be doubled,” said Terry Clower, director of GMU-CRA and the Northern Virginia chair of GMU’s Schar School of Policy and Government, in a statement.

Prices remain relatively stable, and NVAR and GMU-CRA expect prices to increase about 1% to 2% because of factors with conflicting effects: affordability and lessening demand versus low inventory and a resilient labor market.

The report includes expectations for three submarkets: Fairfax and Arlington counties and the City of Alexandria.

In Fairfax County, the largest locality in NVAR’s region, single-family home prices are predicted to have an average 0.7% price gain, while total unit sales will drop 10% for the year and inventories will drop 13%.

Fairfax County townhouses will lose 22% of inventory, and total unit sales will drop 15% annually. Median prices are expected to increase by 0.4%. The condo market will likely see a 23% decrease in sales and an average 4.3% rise in prices.

The average prices for single-family homes in Arlington are expected to increase 9.2%, with sales decreasing by 4% and inventories continuing to drop — the average number of units for sale will decrease by 7%.

Arlington townhome prices will remain flat because of dropping inventory, and the condo market will also have low inventory as condo owners stay put due to mortgage rates and a lack of available alternative housing options.

In Alexandria, home prices will increase about 1.6% as prices become less volatile, according to the report. Alexandria is expected to have a better sales trend than other markets in the region, with an increase in 5.4%, or 19 homes. Single-family housing supply in Alexandria will continue to decline but remain above late 2021 levels.

The Alexandria townhome market will likely see flat inventory levels, and unit sales will drop about 15% to about 619 units. Prices will rise about 3%, according to the forecast. Condo sales are expected to decline by about 17%. The annual average condo price will increase about 8%.

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.

Hampton Roads housing inventory rises, listings still low

Residential inventory in Hampton Roads has risen slightly from last year, although active listings remain below pre-pandemic levels, according to April data from the Real Estate Information Network Inc. (REIN).

Active listings in April were down 0.97% year-over-year from the 3,187 listings that REIN recorded in April 2022. Pending sales stood at 2,363, down 21% from last year. Settled sales were down 27% from April 2022, with 2,053 sales last month.

The month’s supply of inventory (MSI), a calculation of how long there would be homes on the market if no new inventory was added, was 1.32 in April, up from 1.01 in April 2022. The MSI in March was 1.27.

“Interest rates continue to fluctuate, and that’s causing hesitation for some potential buyers, but the lack of inventory remains our biggest challenge here in Hampton Roads,” Jon McAchran with AtCoastal Realty and president of the REIN board of directors said in a statement. “Consumers are still looking to buy. They just need more homes, and the right homes, for them to choose from.”

The median sales price (MSP) in Hampton Roads remained at $320,000, the same MSP as March. That’s a 0.20% increase from April 2022, which had an MSP of $319,375. Last month, the South Hampton Roads MSP was $330,000, while the Virginia Peninsula’s MSP was $297,512. In South Hampton Roads, Virginia Beach had the highest MSP, at $365,000. James City County had an MSP of $480,000.

Residential listings spent a median of 12 days on the market in April, down from 15 days in March and up from seven days last year.

“Buyers are becoming increasingly discerning in their choices, mostly due to the increased costs due to the higher interest rates, but they’re also acting quickly when a home that matches their criteria comes on the market,” McAchran said in a statement.

Residential new construction sales numbered 277, down 7.58% from the 306 recorded in April 2022.

Compared with March, the region’s active residential listings rose slightly from the 3,124 recorded then. Pending sales in April dropped 11.8% from March’s 2,578. Settled sales dropped 9.9%, down from 2,277 in March.

Founded in 1969, REIN is a regional multiple listing services that covers an area stretching from Williamsburg east to Virginia Beach and south across the North Carolina border.

Va. spring housing market has slow start

Virginia’s residential real estate market is off to a slow start this spring.

Virginia home sales in March dropped 24% from March 2022, marking the 16th consecutive month of declining sales, and the median sales price dropped year-over-year for the first time in seven years, according to a Virginia Realtors report released Thursday.

Virginia home sales totaled 8,709 in March, a decrease of 2,737 sales than in the same month in 2022. The number of sales in March last fell below 9,000 in 2016, and new sales contracts last month were at the lowest level the state has seen in more than a decade, according to Virginia Realtors.

Sales rose 33.9% from February, which reflects a typical seasonal spike, Virginia Realtors reported.

“Virginia’s spring housing market is off to a slow start, resulting in some downward pressure on price levels; however, the state’s tight level of inventory is keeping prices somewhat insulated in many markets,” Virginia Realtors Chief Economist Ryan Price said in a statement.

Higher mortgage rates also provided downward pressure on sales. In the week ending March 30, the 30-year fixed-rate mortgage was 6.32%, up from 4.67% in the week ending March 31, 2022, according to Freddie Mac data.

The statewide median sales price in March was $370,000, a decrease of $5,000 or 1.3% from March 2022. The median sales price in Virginia peaked in spring 2022 at more than $401,000. Nonetheless, about 64% of Virginia counties and cities had a higher median sales price in March compared with last year, with the strongest growth in areas of the Shenandoah Valley, the Lynchburg region, the Greater Piedmont region and parts of South Central Virginia.

The largest market price segment in Virginia remains the $200,001 to $400,000 range, which comprised 43.8% of all sales in March.

Virginia homes are staying on the market longer on average, continuing a trend over the past eight months. In March, the statewide average for days on the market was 35 days, 11 days longer than the same month last year.

The commonwealth had 15,108 active listings on the market at the end of March, up 1,498 listings from last year’s number. New listings totaled 11,505, down 3,312 listings from last year, a 22.4% drop. Virginia had about 1.5 months of supply in the housing market in March, up from a 1.1-month supply a year ago.

Despite slowing sales, the market remains competitive for buyers due to low inventory and pent-up demand. Virginia’s average sold-to-list price ratio rose above 100% (to 100.2%) in March for the first time in six months, meaning that on average, sellers are getting more than their asking prices.

“Virginia is seeing some mixed signals in our spring market data,” Virginia Realtors President Katrina M. Smith said in a statement. “The median home price has fallen slightly, but buyer demand has somewhat shielded prices. Active listings are staying on the market longer, but fewer new listings are coming available. This data signals a slower spring market that is likely to remain competitive for Virginia’s buyers.”

Virginia Realtors is a trade association representing more than 38,000 Realtors.

Fed 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) has contracted slightly since March, 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.

Here’s what the April 19 Beige Book edition revealed about the direction the economy is taking:

Manufacturing activity softened as manufacturers had fewer new orders, and customers began pushing back on price increases as supply chain pressures eased. Employers continued to struggle to find skilled workers.

Travel and tourism spending increased moderately in the region. The sector saw strong revenue growth, with hotels reporting increases in the number of rooms sold and higher room rates compared with last year. In February, Virginia hotel revenues were 14.9% higher than those recorded in February 2019.

Ports and trucking companies in the Fifth District reported declining freight volumes, especially in imports of retail goods and household items. Exports of loaded containers were stronger, though, particularly in auto and machine parts. Empty containers remained at ports slightly longer.

Because shipping carriers had excess availability, their spot rates fell to pre-pandemic levels or below, significantly under contract rates. Airfreight rates stabilized as airlines pulled back on freight capacity, according to the Fed.

Trucking companies saw a moderate decline in freight volumes and received some customer pushback on continued rate increases. Firms continued to add drivers but scaled back recruiting because of the lowered freight volumes. The supply of new tractors and trailers improved.

The Fifth District’s employment increased slightly compared with its March report, although respondents reported a continued lack of qualified workers. Wages increased modestly, partly because Virginia, Maryland and Washington, D.C., increased minimum wages.

Prices in the region continued to grow at a strong rate, the Fed reported. Manufacturers reported average price increases of about 5.5%, down from the 2022 peak, and service sector firms reported prices increases of about 6.5%, a near-peak rate.

Retail activity remained strong, although firms reported slightly lower sales and demand. Some retailers said they expected business to pick up soon, as their busy seasons started in April.

The typical spring housing market did not appear. Sales and pending sales in the Fifth District residential real estate market declined, and sales prices remained flat, although respondents began seeing new contracts at less than list price. Housing inventory has decreased year-over-year, and new listings have dramatically decreased. Although construction costs were down, builders did not buy new lots because of economic uncertainty.

Commercial real estate activity declined overall last month, particularly in the office market. Retail and industrial/flex space leasing, however, remained strong, and the industrial sector had higher rental rates. Sales slowed due to rising interest rates, and some banks stopped lending for new commercial construction projects or tightened underwriting standards.

Demand for all types of loans slowed modestly, but the commercial loan portfolio was the weakest. The region saw mixed demand from consumers, but demand for home equity and used auto loans increased some.

Deposit levels declined slightly, although some banks had an inflow of deposits following Silicon Valley Bank’s collapse. Financial institutions expected loan and deposit levels to decline moderately for the rest of the year, according to the Fed.

Va. home sales down 20% from a year ago

Virginia home sales were down 20.3% in February compared with the same month last year, marking the 15th consecutive month of declining sales, according to a Virginia Realtors report released March 21.

Home sales in the commonwealth last month totaled 6,505, a decrease of 1,655 sales from February 2022. The Northern Neck and parts of Northern Virginia, the Shenandoah Valley and Central Virginia have had the sharpest drop in sales so far this year, according to Virginia Realtors.

The statewide decline is likely due to the rise in interest rates, which more than doubled over the year. In the week ending on Thursday, the average 30-year fixed-rate mortgage was 6.42%, down from 6.60% the week before, according to Freddie Mac data. The average rate a year ago was 4.42%.

The state median sales price, however, rose 5.7% from a year ago, jumping $20,000 to $370,000. The rise is a reflection of tight inventory, according to the Virginia Realtors report. Places in Central Virginia, the New River Valley and Southern Virginia continue to see median price growths of 10% or more. Prices have dipped in the Northern Neck, the Chesapeake Bay and rivers area and parts of the Rockbridge Highlands region.

Statewide, homes spent an average of 38 days on the market, up eight days from February 2022, and on average, sellers are getting slightly less than their asking prices.

“This is some good news for buyers that are active in the market,” Virginia Realtors President Katrina M. Smith said in a statement. “Nearly all of Virginia’s markets have more active listings available than they did one year ago.”

The Virginia market had 14,558 active listings at the end of February, up 2,416 from last year’s number.

“Active listings are building up, but keep in mind that it’s not from new listings, which remain down,” Virginia Realtors Chief Economist Ryan Price said in a statement. “February saw a 22% reduction in new listings since the same time last year, reflecting hesitation from sellers.”

After the drop in mortgage rates following the collapse of Silicon Valley Bank and the subsequent banking crisis, the housing market could see an influx of buyers who have been waiting for mortgage rates to fall.

Virginia Realtors is a trade association representing more than 37,000 Realtors.

Hampton Roads housing market appears to stabilize

The Hampton Roads housing market appears to be stabilizing, according to a new report from the Real Estate Information Network Inc. (REIN).

“We expect 2023 to be similar to pre-pandemic years where inventory increases in the spring and summer, and as long as buyers have inventory to choose from, they’re going to shop for homes,” REIN Board of Directors President Jon McAchran said in a statement.

Active residential property listings in Hampton Roads rose 25.15% year-over-year in February, from 2,501 to 3,130 listings. Pending sales dropped 19.92% from February 2022 — from 2,570 to 2,058 sales — and settled sales dropped 22.65%, from 2,177 to 1,684 settled sales.

“It’s fairly typical that interest rates back in February of last year as compared to February this year have changed drastically, nearly in many cases double,” said Barry Nachman with Century 21 Nachman Realty and secretary of REIN’s board of directors. “So you’re going to definitely see a fallout effect of people still paying higher pricing … and then much higher payments with interest rates, so there’s a little bit of pullback anytime that happens.”

Compared with last year, the median sales price for the region rose almost 8%, from $290,500 to $313,650, despite rising mortgage rates. The region’s median sales price in February is a 3.5% increase from January.

“With interest rates rising, less people will qualify, but it’ll stabilize our marketplace. But here’s the positive: Our sales prices are still up,” Nachman said.

Residential listings spent a median of 20 days on the market, a decrease of seven days from January. February was the first month since March 2022 that median days on the market decreased.

Residential new construction sold in REIN’s Multiple Listing Service dropped from 244 sales in February 2022 to 228 sales in February 2023.

Compared with January, the region’s active residential listings in February dropped 4.16%, or by 136 listings. Pending sales rose 5.92% from January, with 2,058 pending sales in February. Settled sales rose 12.10% from January, to 1,684 settled sales.

“January was a little more normalized for January. To have a big increase in February, when we’ve had such a housing shortage, is somewhat of an anomaly,” Nachman said. “But it’s a good thing because it’s giving buyers an opportunity to find a home, where last February it was a lot more difficult as well as February before and all the months throughout.”

Ups and downs

Compared with the previous two years, 2022 was less of a roller coaster for the housing market in Virginia, but it still presented challenges for many would-be first-time homebuyers.

As inflation rates grew, peaking at a 40-year high of 9.1% in June 2022, the Federal Reserve increased interest rates rapidly. Inflation fell to 6.5% in December 2022, but the higher rates put the brakes on the housing market in Virginia with an abrupt screech.

Over the course of 2022, 123,000 homes sold statewide, about 20% less than in 2021 but closer to pre-pandemic activity, according to Virginia Realtors. The sharpest declines were seen in Northern and Central Virginia. Bidding wars were less common last year than during the height of the pandemic, but it still wasn’t a great market for buyers, as the state’s median sales price jumped about $25,000 to $375,000 in December 2022, compared with December 2021.

However, in February, mortgage rates started to decline, prompting renewed demand. According to a Wall Street Journal report, the average 30-year home loan rate has come down by nearly a full percentage point from a 20-year high above 7% in November 2022 — although that’s still double the 3% rates from November 2021. 

On the commercial side, many large-scale projects are now in the works across the state. In Richmond, the ball is rolling on the $2.44 billion Diamond District mixed-use development centered around a new baseball stadium for the Richmond Flying Squirrels, set to be completed in time for the 2025 baseball season.

At the end of 2022, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority received five proposals from developers to redevelop the City Center Innovation District, a 9.4-acre downtown area that includes the closed Richmond Coliseum, which the city wants demolished. A 10-person evaluation panel is scheduled to narrow the group of five during the first quarter of this year.

In Hampton Roads, two of famed entertainer and Virginia Beach native Pharrell Williams’ larger projects made progress in 2022: the $1.1 billion redevelopment of Military Circle Mall in Norfolk and the $350 million Atlantic Park project in Virginia Beach.

Negotiations started last year, but as of late January, Williams’ Wellness Circle team had not yet officially signed documents to redevelop Military Circle Mall, which would include 1,100 residential units, a 200-room hotel and a 16,000-seat arena. In November 2022, the music superstar prodded Norfolk leaders to move forward with the project, saying “The ball’s in their court.”

Meanwhile, the Oceanfront-based Atlantic Park, Williams’ surf park project with Virginia Beach-based Venture Realty Group, secured pending financing in January and is getting closer to groundbreaking, with completion set for summer 2024. The first phase includes 120,000 square feet of retail, 310,000 square feet of residential and 15,000 square feet of office space.

Northern Virginia is seeing massive development along the Silver Line’s Loudoun County extension, which opened in November 2022 after an eight-year delay. Reston Town Center, which has 5.1 million square feet of office space, is set to add 700,000 to 800,000 square feet more in the next few years, part of a $3 billion investment by Boston Properties Inc., and developer Comstock Inc. is busy building 7 million square feet of offices and residential space at Reston Station. The company has plans for 2.5 million square feet of multiuse space at Loudoun Station in Ashburn.

In Danville, the long-awaited White Mill project broke ground in early 2023. The $100 million public-private redevelopment of the 550,000-square-foot former textile mill, now known as Dan River Falls, is a joint venture between the city’s industrial development authority and The Alexander Co. It will have 147,000 square feet of commercial space and 150 apartments geared toward employees of the forthcoming Caesars Virginia casino.  

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Sadler Square subdivision in Glen Allen to start sales in 2024

Construction on Sadler Square, a 128-home development in Glen Allen will begin this year, with homes ready for sale in 2024, Vienna-based real estate developer Miller & Smith announced mid-February.

The 54-acre development is located at 4350 Glasgow Road near the Short Pump/Innsbrook Interstate 64 interchange on West Broad Street. The single-family houses will be roughly 3,200 square feet each with front-load garages. The company would not disclose the cost of development or estimated home prices, citing variables that could change before sales start in 2024.

Miller & Smith is seeking construction vendors to begin construction this year. It plans to develop and build the community in three sections, with development phases overlapping. Sadler Square’s first section will be 47 lots. The second will be 41 lots and the third will be 40 lots, according to Miller & Smith.

Founded in 1964, Miller & Smith has built more than 6,500 single-family homes, 10,000 townhomes and 2,000 condos across Virginia and Maryland. This is the company’s first new home project in the Richmond area, although it has previously developed lots and provided development oversight for financial partners in the area.

Thalhimer rebrands property management division

Cushman & Wakefield | Thalhimer is rebranding its residential property management division from Residential Property Services to Thalhimer Multifamily (TMF), the real estate firm announced Thursday.

TMF is Thalhimer’s largest operating group, employing more than 200 people and managing more than 9,100 multifamily units across Virginia and North Carolina.

“Our firm’s strategic plan emphasizes growth in our residential property management division,” Thalhimer President and CEO Lee Warfield said in a statement. “Over the next year, we anticipate adding 1,000-plus new multifamily units to our management portfolio, and rebranding the division to Thalhimer Multifamily is a more accurate representation of what we do and where we are going as a firm.”

TMF will be managing Eddy on the James, a 221-unit project located at 700 Semmes Ave in Richmond. Charleston, South Carolina-based The Beach Co. developed the project.

Founded in 1913, Thalhimer has nearly 425 employees, including almost 100 brokers. It has offices in Charlottesville, Fredericksburg, Lynchburg, Newport News, Richmond, Roanoke and Virginia Beach. Thalhimer manages about 30 million square feet of commercial property.

Danville lacks housing options for workforce

Danville is having a “Field of Dreams” dilemma.

The famous movie quote, “If you build it, they will come,” rings all too true in the former mill town, which is attracting companies to its industrial parks and old
Dan River Mills properties, along with a $650 million casino. It’s good news on paper, but where will “they” live?

“If they come, how many will be here?” Kenneth Danter asked. The president of national real estate market research firm The Danter Co., Danter presented a report on Danville’s housing market last August at the first Southern Virginia Regional Housing Summit.

Much of the activity is spurred by the forthcoming $650 million Caesars casino expected to open in 2024, as well as a temporary casino set to open by midyear. Caesars Entertainment Inc. expects to create 900 construction jobs and 1,300 casino jobs.

Other companies coming to town are expected to add 2,300 jobs in 2023. Danville doesn’t have enough housing to meet current demand, much less for incoming workers at the casino and six to eight other businesses. “We’ve not had a lot of construction; in some years, we’ve had zero construction,” Danter said.

Currently, there is a need for 606 houses and 760 apartments, and with more than 3,000 new jobs, the city will need 138 single-family houses and 921 apartments, he added.

The city has already identified properties for residential construction or rehabilitation and showed design concepts. These include Danville Mall, which has lost three of its five anchors and could be renovated as a mixed-use property, and the 60-acre Monument-Berryman Redevelopment Area, city-controlled land where more housing could be built.

Andrew Clark, vice president of government affairs for the Home Builders Association of Virginia, says the summit caught residential builders’ and developers’ attention, and between 10 to 15 said they’re interested in exploring potential projects in Danville.

Also, the city is receiving proposals for the Monument-Berry properties, says City Manager Ken Larking. The deadline is Feb. 17, and a selection will be made March 31.

The Danville Redevelopment and Housing Authority is also seeing an influx of developers interested in partnering on affordable housing for those making 30% to 80% of the city’s median income of $37,147.

“For the most part, that’s your workforce,” says Larissa Deedrich, its CEO and executive director.