VIRGINIA. Home SAleS RepoRt QUARTER. Analysis by the Virginia Center for Housing Research at Virginia Tech

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1 VIRGINIA Home SAleS RepoRt THIRD second QUARTER 2015 Published by Virginia association of realtors, the advocate for real estate professionals and property owners in Virginia.

2 The Virginia Association of REALTORS (VAR) publishes monthly and quarterly home sales reports to provide our members, the media and real estate-related industries with current data. The report data comes from a variety of sources and is analyzed by the Virginia Center for Housing Research at Virginia Tech. All data may be used with citation to the proprietary owner, the Virginia Association of REALTORS. The data presented is based on specific economic regions comprised of counties and independent cities in Virginia, as detailed in the map below. However, it should be noted that these regions do not necessarily align with the counties and cities that comprise the 27 local REALTOR associations in Virginia. For example, the economic region defined as Northern Virginia encompasses more counties and cities than those within the bounds of the Northern Virginia Association of REALTORS. Please take this into consideration when referencing regions. Economic Regions Central Valley: Central Virginia: Hampton Roads / Chesapeake Bay: Northern Virginia: Roanoke / Lynchburg / Blacksburg: Southside Virginia: Southwest Virginia: Albemarle, Augusta, Bath, Buena Vista City, Charlottesville City, Fluvanna, Greene, Harrisonburg City, Highland, Lexington City, Nelson, Rockbridge, Rockingham, Staunton City, Waynesboro City Amelia, Buckingham, Charles City, Chesterfield, Colonial Heights City, Cumberland, Dinwiddie, Goochland, Hanover, Henrico, Hopewell City, King and Queen, King William, Louisa, New Kent, Nottoway, Petersburg City, Powhatan, Prince Edward, Prince George, Richmond City, Sussex Accomack, Chesapeake City, Franklin City, Gloucester, Hampton City, Isle of Wight, James City, Lancaster, Mathews, Middlesex, Newport News City, Norfolk City, Northampton, Northumberland, Poquoson City, Portsmouth City, Southampton, Suffolk City, Surry, Virginia Beach City, Williamsburg City, York Alexandria City, Arlington, Caroline, Clarke, Culpeper, Essex, Fairfax, Fairfax City, Falls Church City, Fauquier, Frederick, Fredericksburg City, King George, Loudoun, Madison, Manassas City, Manassas Park City, Orange, Page, Prince William, Rappahannock, Richmond, Shenandoah, Spotsylvania, Stafford, Warren, Westmoreland, Winchester City Alleghany, Amherst, Appomattox, Bedford, Bedford City, Botetourt, Campbell, Covington City, Craig, Floyd, Franklin, Giles, Lynchburg City, Montgomery, Pulaski, Radford, Roanoke, Roanoke City, Salem City Brunswick, Charlotte, Danville City, Emporia City, Galax City, Greensville, Halifax, Henry, Lunenberg, Martinsville City, Mecklenburg, Norton City, Patrick, Pittsylvania Bland, Bristol City, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, Wythe Page 2

3 2015-Q2 Third Quarter Market Summary There were approximately 31,176 home sales in Virginia in the third quarter, 13% more than in the third quarter of Increased sales were experienced in every price range, except homes that sold for more than $1M. Increased sales in nearly every price range may be an indication of higher consumer confidence and overall market health. Each region of Virginia experienced higher yearover-year sales, with the exception of the Central Valley. The median sales price indicated little seasonal change in sales prices in the third quarter. Prices increased from the second to third quarter, which is somewhat unusual in recent years. Median sales price increased 2.3% yearover-year, but year-over-year changes varied throughout the state. Regional changes in median sales price ranged from a decrease of 2.3% in the Central Valley to 9.0% and 9.5% in Southside and Southwest Virginia respectively. Days on the market increased throughout the quarter, following a typical seasonal trajectory. Nonetheless, days on the market in the third quarter of 2015 were 6.8% lower than the third quarter of Page 3

4 Virginia Month-to-Month Sales Trends Single Family Homes, Townhomes, Condos ,000 Number of Single Family, Townhome and Condo Sales 12,000 10,000 8,000 6,000 4,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ,068 5,775 7,213 7,698 9,064 9,740 8,664 9,026 7,213 7,259 7,405 6, ,533 5,942 7,470 8,665 10,488 10,802 10,383 10,155 8,186 7,950 6,949 7, ,356 5,642 7,109 8,467 9,647 10,579 10,121 9,421 8,290 8,398 6,599 8, ,772 6,044 8,441 9,079 10,232 12,358 11,723 10,113 9,340 There were approximately 9,340 home sales in September 2015, 13% more sales than in September Sales decreased 7.6% from August to September, a relatively small decrease compared to previous years. Since sales typically stay relatively constant from September to October, Virginia is likely to show strong sales throughout the fall, barring any dramatic decrease in November. Page 4

5 Virginia Quarterly Residential Sales Single Family Homes, Townhomes, Condos 35,000 32,041 31,176 Number of Single Family, Townhome and Condo Sales 30,000 25,000 20,000 15,000 26,502 24,911 21,509 18,910 29,962 28,728 22,458 18,153 28,757 28,008 23, % YOY 21,327 10, Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarter The pace of home sales was 11.31% higher in the third quarter of 2015 compared to the third quarter of Large year-over-year increases in sales in July (15.25%) and September (11.8%) account for the majority of the year-over-year increase in quarterly sales. Sales in August 2015 were 6.7% higher than sales in August Page 5

6 Virginia Annualized Residential Sales Single Family Homes, Townhomes, Condos 110, , , ,484 Number of Single Family, Townhome and Condo Sales 100,000 90,000 80,000 70,000 60,000 86,658 88,568 90,978 91,832 95,292 99, ,058 99, % 98,096 97,376 98,310 50, Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarter Each data point on the graph above includes 12 months of home sales data ending in the quarter shown. For example, the figure (106,950 sales) includes home sales from October 2014 through September This rolling sum of home sales can provide a clearer indicator of long-term trends in Virginia s housing market. The annualized sales measure increased 2.1% from 2015-Q2 to. The third quarter of 2015 was the fourth consecutive quarter of increase in this measure, after a steady decline from 2013-Q4 to 2014-Q3. Further, annualized sales have increased 23.4% since the second quarter of Sustained growth in this measure is a good indication of improved long-term performance in the residential real estate market. Page 6

7 Regional Changes in Sales 2014-Q3 vs. Units Northern Virginia +10.7% Central Valley -7.2% Roanoke / Lynchburg / Blacksburg +18.8% Southwest Virginia +16.3% Southside Virginia +3.8% Central Virginia +13.1% Hampton Roads / Chesapeake Bay +14.0% Region 2014-Q3 Change Central Valley 1,808 1, % Central Virginia 4,651 5, % Hampton Roads / Chesapeake Bay 6,411 7, % Northern Virginia 12,077 13, % Roanoke / Lynchburg / Blacksburg 2,218 2, % Southside Virginia % Southwest Virginia % All of Virginia 28,003 31, % Almost every region of the state experienced a relatively strong third quarter compared to the third quarter of 2014, with the exception of the Central Valley. The Central Valley experienced a 7.2% decrease in sales year-over-year, with 130 fewer sales in than in the third quarter of Page 7

8 $350,000 Virginia Median Residential Sales Price Single Family Homes, Townhomes, Condos $300,000 Median Sales Price $250,000 $249,500 $248,000 $241,000 $233,000 $269,900 $254,000 $249,000 $235,000 $267,000 $259,000 $255,000 $244, % $259,990 $265,000 $200, % $150, Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarter The median sales price in Virginia increased slightly (2.3%) year-over-year to $265,000 in the third quarter of An increase in median price from the second quarter to the third quarter is unusual for Virginia in recent years. Over the longer term, the median sales price in Virginia increased 6.9% over the third quarter of Virginia prices remain very stable, showing very little seasonal change. Page 8

9 Regional Changes in Median Sales Prices 2014-Q3 vs. Northern Virginia -1.3% Central Valley -2.3% Roanoke / Lynchburg / Blacksburg -0.6% Southwest Virginia +9.5% Southside Virginia +9.0% Central Virginia +3.3% Hampton Roads / Chesapeake Bay +4.7% Region 2014-Q3 Change Central Valley $220,000 $215, % Central Virginia $209,000 $216, % Hampton Roads / Chesapeake Bay $215,000 $225, % Northern Virginia $379,900 $375, % Roanoke / Lynchburg / Blacksburg $164,975 $164, % Southside Virginia $81,900 $89, % Southwest Virginia $105,000 $115, % All of Virginia $259,000 $265, % Regional changes in median sales price ranged from a decrease of 2.3% in the Central Valley to and increase of 4.7% in the Hampton Roads/Chesapeake Bay region. Southside and Southwest Virginia showed more dramatic increases, 9.0% and 9.5% respectively, but lower overall sales prices and fewer sales make the percent change more dramatic and less meaningful. Overall, the median sales price stayed relatively stable throughout the state. Page 9

10 Virginia Quarterly Residential Sales Volume ($B) Single Family Homes, Townhomes, Condos Billions of Dollars of Residential Sales % Q Q Q Q Q Q Q Q Q Q Q Q Q Q3 Quarter This graph illustrates the dollar value of residential real estate sold (in billions) during each quarter over the past three years. The volume of real estate sold in the third quarter of 2015 ($10.1B) increased 11% from the third quarter of 2014 ($9.1B). Sales volume increased primarily due to increased sales, since increases in sales were much more significant than increases in price throughout the state (see pages 7 and 9). Page 10

11 Virginia Price Distribution Of Residential Home Sales Single Family Homes, Townhomes, Condos 2014-Q3 $2M % $1.5M - $2M % $1M - $1.5M % $750K - $1M % Price Range $500K - $750K $400K - $500K 3,097 3, % 2,701 3, % $300K - $400K 4,404 5, % $200K - $300K 6,637 7, % $100K - $200K 7,052 7, % 0 - $100K 2,745 2, % ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 Number of Single Family, Townhome and Condo Sales Year-over-year home sales increased in all price ranges in the third quarter, except for homes selling for more than $1M. Sales in the $300K-$1M ranges showed the largest increase, but home sales in the lower price ranges also increased substantially. Increased sales in nearly every price range may be an indication of higher consumer confidence and overall market health. Page 11

12 Virginia Average Days On Market Single Family Homes, Townhomes, Condos Average Days On Market % YOY Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarter Days on the market decreased 6.8% year-over-year. Average days on the market remained the same from the second quarter to the third quarter of 2015, which has become a trend over the past three years. Days on the market increased throughout the third quarter, from 64 in July to 71 in September. Page 12

13 Monthly Residential Sales VIRGINIA (All MLS-Reported Home Sales*) UNITED STATES (Existing Home Sales*) 16, ,000 14,000 12,000 10,000 8, , ,000 10,172 10, , , ,000 6,000 4,000 2,000 0 Jul-14 Aug-15 Sep-15 Oct-15 Nov-15 Dec-14 (p) Jan-15 (p) Feb-15 (p) Mar-15 (p) Apr-15 (p) May-15 (p) Jun-15 (p) Jul-15 (p) Aug-15 (p) 200, ,000 0 The pace of Virginia home sales has been similar to the pace of sales in the United States as a whole throughout 2015, but decreased more substantially in August. Virginia experienced a particularly low number of sales in August, so high sales in September will likely put Virginia back in sync with the sales in the U.S. as a whole. Monthly Residential Median Sales Price $300,000 $250,000 VIRGINIA (All MLS-Reported Home Sales*) UNITED STATES (Existing Home Sales*) $268,000 $266,500 $300,000 $250,000 $200,000 $222,500 $230,200 $200,000 $150,000 $150,000 $100,000 $100,000 $50,000 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 (p) May-15 (p) Jun-15 (p) Jul-15 (p) Aug-15 (p) $50,000 The Virginia median sales price decreased more substantially than the U.S. median price from June to August. The Virginia median sales price generally tracks the trajectory of U.S. median sales price, while remaining higher overall. *Virginia sales reported in the graphs above include all single family, townhouse, and condo sales. U.S. sales are existing single family sales as reported by Realtor.org. Existing sales do not include newly constructed homes sold for the first time. Page 13

14 6% 6% 6% 5% 5% 5% 5% 5% 4% 4% 4% 5.9% 5.6% 5.3% 5.5% Virginia Unemployment Rate Source: Bureau of Labor Statistics 5.8% 5.4% 5.3% 2012-Q Q Q Q Q Q Q Q Q Q Q Q2 5.2% 4.9% 4.8% 2015-Q1 unemployment rate based on preliminary February 2015 data. 4.7% 4.9% 4.8% Unemployment rates by state, seasonally adjusted, September 2015 (U.S. rate = 5.1 percent) SOURCE: Bureau of Labor Statistics Local Area Unemployment Statistics 9.0% and over 8.0% to 8.9% 7.0% to 7.9% 6.0% to 6.9% 5.0% to 5.9% 4.0% to 4.9% 3.9% or below Virginia s unemployment rate decreased to 4.3% in September, while the national rate remained unchanged. Decreasing unemployment rates typically have a positive influence on consumer confidence and long-term decreases could boost home sales. September is the third consecutive month in which Virginia has experienced a decrease in its unemployment rate. Page 14

15 Average 30-Year Mortgage Interest Rates Source: FreddieMac 4.6% 4.4% 4.2% 4.0% 3.8% 3.6% 3.4% 3.2% 3.54% 3.36% 3.50% 3.69% 4.44% 4.30% 4.36% 4.23% 4.14% 3.97% 3.72% 3.83% 3.95% 3.0% 2012-Q Q Q Q Q Q Q Q Q Q Q Q2 Average 15-Year Mortgage Interest Rates Source: FreddieMac 3.6% 3.4% 3.2% 3.0% 3.5% 3.4% 3.4% 3.3% 3.3% 3.2% 3.0% 3.1% 3.1% 2.8% 2.6% 2.8% 2.7% 2.7% 2.9% 2.4% 2.2% 2.0% 2012-Q Q Q Q Q Q Q Q Q Q Q Q2 Both 30-year and 15-year mortgage interest rates increased in each month of the third quarter of 2015, although both 30-year and 15-year rates decreased marginally throughout the quarter. July rates were the highest of 2015 thus far, at 4.05% for 30-year mortgages and 3.21% for 15-year mortgages. Page 15

16 The Virginia Association of REALTORS (VAR) is the largest professional trade association in Virginia, representing approximately 31,000 REALTORS engaged in the residential and commercial real estate business. VAR serves as an advocate for homeownership and private property rights and represents the interests of real estate professionals and property owners in the Commonwealth of Virginia. Note: The term REALTOR is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS and subscribes to its strict Code of Ethics. All inquiries regarding this report may be directed to: Martin Johnson Virginia Association of REALTORS Martin@VARealtor.com Page 16

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