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A combination of more sales and higher prices last month led the total sales volume across the Virginia home-sales market up more than 31 percent from a year ago, according to new data.
A total of 8,804 homes went to closing statewide, an increase of 19 percent from the 7,383 transactions in February, according to figures reported by the Virginia Realtors trade organization.
(Not that February 2020 was a slouch; it saw the most number of sales for that month for the preceding four years.)
What is buoying the market? “Strong demand, limited inventory and very low mortgage rates have driven growth,” said Lisa Sturtevant, chief economist for the trade organization.
Real estate is a business of supply and demand, and those with the supply control the situation. In February, there were just 15,712 properties on the market statewide, a decline of nearly 44 percent from a year before.
“The supply of available homes for sale has been steadily declining for years. However, the COVID-19 pandemic has accelerated that trend,” Sturtevant said. “At the end of February, total inventory was only about a third of what it was five years ago.”
(The lone major exception is in the Northern Virginia condominium market, which has seen a boost up in inventory in recent months.)
How pro-seller is the overall market? For the first time, the average sold price stood above 100 percent statewide, something that has happened in individual regions of the commonwealth but never for the state as a whole.
Sellers indeed have been cashing in. The median sales price of $320,000 in February was up from $292,000 a year before – an increase of 9.6 percent - and homes found a buyer in one-third less time that it took a year before.
Add up all the sales, and total sales volume stood at $3.5 billion statewide for the month, up from $2.7 billion a year ago.
But things may be cooling somewhat even as the thermometer heats up, in part due to limited supply.
“It is likely that sales activity this spring will be slower than a typical spring, after coming off of an unusually strong fall and winter market,” Sturtevant said.
February’s total pending sales stood at 18,575, up 2.4 percent from a year ago and seeming to confirm that the market is easing off the accelerator.
(February’s figures represent the last year-over-year comparison to a pre-COVID month. The Virginia real-estate market hit a rocky patch last March with the advent of the pandemic and resulting lockdown, before overcoming any misgivings and blooming again starting in June and July 2020).
The biggest challenge for prospective buyers is in the lower end of the market. The percentage of homes available for less than $200,000 declined from one-quarter of the market in February 2020 to less than one-fifth of it in February 2021. At the other end of the spectrum, 15.4 percent of all homes sold last month went for $600,000 or more, compared to 12.2 percent 12 months before.
For the first two months of the year, the statewide sales total stands at 17,610, up 24 percent from the same period a year before, and the median sales price is $317,000, up 12 percent. Sales volume for the January-February period stood at $6.9 billion, up 36 percent from $5.1 billion.
All figures are preliminary, and represent most, but not all, home sales during the period.