Uncertainty about the future is impacting Virginia’s real-estate market, but how long-lasting and deep any decline may be remains an open question, according to the Virginia Realtors’ trade group.
“The extent and duration of the economic downturn is uncertain,” said Lisa Sturtevant, the organization’s chief economist, in an analysis accompanying new March sales data.
Given the soundness of the Virginia economy going into the COVID-19 downturn, “that relatively strong economic position will help Virginia’s economy and housing market rebound once the pandemic eases,” Sturtevant predicted.
March’s home-sales data represent something of a bygone world, as the transactions were in the pipeline and, often, at closing before the full impact of the pandemic became apparent.
Sales for the month totaled 10,512 statewide, up 8 percent from a year before, with double-digit growth reported in most of the less-populated corridors of the commonwealth and more modest increases reported in Northern Virginia, Hampton Roads and the greater Richmond area. One outlier was Southside Virginia, a geographically large but relatively sparsely populated swath between Hampton Roads and Southwest Virginia, where sales were off slightly.
The median sales price of all homes that went to market during the month was $305,000, with year-over-year increases reported in every geographic area. Median prices ranged from $117,000 in Southside Virginia to $475,000 in Northern Virginia.
Despite regional variations, “most markets [in Virginia] were sellers’ markets” in March, Sturtevant said.
Total sales volume for the month stood at $3.91 billion, up 16.4 percent from a year before, and the number of days, on average, it took for a home to go from listing to ratified sales contract improved from 56 in March 2019 to 47 in March 2020. While the average days on the market showed improvement in all areas, it also showed a wide disparity, ranging from 25 days in Northern Virginia to 178 days in Southwest Virginia.
Besides simply adjusting to a social-distancing world, one of the biggest challenges in the process of buying and selling homes has been anticipating what might happen with the mortgage-lending market. Since the onset of the pandemic, the market has had an “incredibly volatile” reaction, the Realtors’ group said – although, in general, interest rates remain low. But individuals angling to purchase a home may face more hurdles to go through as lenders impose stricter standards, particularly for those with spotty credit.
Although some in the Northern Virginia real-estate world have reported relatively healthy market activity in recent weeks, the broader marketplace is going to feel an impact. The National Association of Realtors predicts a 12-percent decline in total national sales in 2020 compared to 2019, a figure suggesting that while summer will see a rebound as buyers now on the sidelines get back into the market, total sales would not be plentiful enough to make up for lost ground.
On the plus side, for sellers and the overall market, inventory of available properties already was tight prior to the COVID-19 situation, which is holding prices steady and, in some cases, encouraging prospective purchasers to get in now rather than risk being left behind if and when the market accelerates in a post-virus world.