Second quarter shows strong growth for residential real estate

Virginia’s residential real estate market continued to gain strength in the second quarter.

The number of sales, value of transactions, median price, and average length of time on the market illustrated year-over-year gains, according to a home sales report released Monday by the Virginia Realtors Association (VAR).

Statewide, the market saw 37,201 closed residential transactions, a 5.3 percent increase over the 35,317 units sold in the second quarter of 2016. The value of those transactions was boosted by a rising median price, and totaled $13 billion, an increase of 9.2 percent from 2016’s second quarter volume of $11.9 billion.

“Virginia’s residential market has continued to gain strength as buyer motivation remains very high and the relatively low financing rates offer great opportunity for market entry,” VAR President Claire Forcier-Rowe said in a statement. “The steep drop in the average length of time that properties are on the market is the clearest indicator of buyer urgency.”

The rise in the second quarter 2017 sales pace was spread across the strong performance of each month in the quarter. Historical trends indicate that Virginia home sales peak in June and begin to taper through the remaining summer months into the fourth quarter. According to VAR, each month of the year so far has outperformed its 2016 benchmark.

The aggregate median sales price for the second quarter was $288,000, an increase of 3.2 percent, compared to the same time last year.

This year’s second quarter home sales increased in all price bands except the lowest ($0 to $200,000), where low levels of inventory affect the number of sales possible. Sales increased especially in ranges above $400,000.

The average number of days on the market dropped to an average of 54 days for second quarter, 14.3 percent lower than last year’s second quarter average of 63 days.

The VAR said the average cost of borrowing remains low, encouraging market entry for buyers in all price brackets. Both 30-year and 15-year averages for fixed mortgage interest rates fell in the second quarter, to 3.99 percent and 3.24 percent, respectively.