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.