Virginia’s residential real estate market sees growth in first quarter

Housings are selling faster and for more money in Virginia. That’s one of the encouraging nuggets in in the “First Quarter 2016 Home Sales Report” released Thursday by the Virginia Association of Realtors, a statewide trade organization representing 31,000 Realtors.

Both the number of sales and the value of transactions rose from the first quarter of 2015, totaling 20,771 units and $6.34 billion, respectively. The value of transactions for the first quarter was 2.2 percent higher than the first quarter of last year, and nearly 15 percent higher than the first quarter of 2014.

Virginia’s low unemployment rate and continuing low mortgages interest rates are encouraging homes sales, VAR noted in its report.
“Performing ahead of the national rate, Virginia’s unemployment rate has continued to decline, reaching its lowest point since 2008. The March drop to 4 percent unemployment supports consumer confidence.  Both 30-year and 15-year fixed mortgage interest rates remain at historic lows, on par with last year’s first quarter rates. Sustained low rates continue to make borrowing accessible,” the report says.

Annualized residential sales, a rolling sum of the home sales closed in the preceding twelve months, rose for the sixth consecutive period, from 108,827 units in the last quarter to 109,185. First-quarter 2016 sales were 8.7 percent higher than the same benchmark last year, reflecting a strong start to the first months of this year and the swell in last year’s summer volume.

The growth trend in annualized sales indicates long-term sustained strengthening of the residential real estate market. Sales rose from $6.21 billion in the first quarter of 2015 to $6.34 billion in 2016. The growth in overall transactional value for the comparable time periods between 2015 and 2016 is due to both continual increases in the volume of sales and steadily rising median price.

The aggregate median sales price for the first quarter was $249,000, up 1.9 percent from the first quarter of 2015. According to the VAR, 2016 had the highest first-quarter median price since 2008.
Year-over-year median sales price increased in all regions, with the exception of a slight decrease decline (0.7 percent) in the Roanoke/Lynchburg/Blacksburg region and a decline in the Southwest region that was more pronounced because of limited inventory.

Compared to the first quarter of last year, 2016 first-quarter home sales increased in all nearly all price categories, with the most significant increases in sales in the price ranges from $200,000  to $300,000  and $400,000 to $500,000.

The report said sales across broad price categories suggest higher consumer confidence as buyers enter the market at varied price points, supporting overall market improvement.

The average number of days on the market has dropped from 2014 and 2015 benchmarks. Reflecting industry seasonality, days on the market are higher in the first quarter than other periods, but decline steadily through warmer months. Relative to last year’s first quarter, the number of days on the market decreased by 6.4 percent from 89 days to 83.