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Archive for Real Estate Trends

Pending and Settled Sales Spring into Action

Courtesy of REIN

Spring is in the air and Hampton Roads is feeling it! The Hampton Road real estate market saw a significant year-over-year upswing in both pending and settled sales for March 2015. “Pending and settled sales rose significantly year-over-year for March 2015. Pending sales are up about 25%, and even more encouraging, settled sales are up almost 30% when compared to last year. No single event can be attributed to this boost in activity, but some contributing factors include the improved weather, rates staying low, and increased consumer confidence.” – says Art Zachary, REIN’s President and Chief Operating Officer of Rose and Womble Realty Company.

Residential active listings did not receive as much of a jolt, but still experienced a 1.83% increase when compared to March 2014. While the overall growth of active listings is to be noted, only three of the region’s seven major cities (Chesapeake, Hampton, Newport News, Norfolk, Portsmouth, Suffolk, and Virginia Beach) experienced increases in the number of homes for sale when compared to March of last year. Chesapeake led the pack with a 12.64% rise, while Hampton and Virginia Beach were runners-up with increases of 9.06% and 4.89% respectively.

The region’s months’ supply of inventory for residential homes for sale is holding steady at 6.31 months. This is only a 1.6% rise from the previous month, February 2015, and an even slighter rise of 0.16% from March 2014 when months’ supply was 6.30 months. For the sixth successive month, Virginia Beach maintains the lowest months’ supply of inventory of the seven major cities at 4.88 months. Suffolk breaks Hampton’s five month streak by having the highest months’ supply of inventory at 7.42 months in March. Days on market for “Solds” has been on the decline for the past three years, settling at 95 days this March as compared to 101 days in 2014.

Residential pending sales for the month of March rose a considerable 24.73% as compared to the prior year. All seven of the region’s major cities saw improvement, some more than others. Norfolk and Portsmouth blazed the trail with the greatest growths of 39.90% and 39.60% respectively. Chesapeake and Hampton were not far behind, both experiencing year-over-year rises of more than 30%. Suffolk lagged behind with the lowest increase of 0.66%. This consistent increase in pending sales suggests continued escalating settled sales in the months to come, assuming all transactions conclude satisfactorily.

March’s residential settled sales rose 29.76% when compared to March 2014. Of the region’s seven major cities, Hampton surged with the most growth, with a year-over-year increase of 58.95%. All of the other major cities showed progress as well, ranging from 5.93% (Suffolk) to 41.36% (Virginia Beach). The region’s median sales price for March 2015 is $209,000, up 5.29% from the previous year when it was $198,500.

While the number of distressed homes, those that are either short sales or foreclosures, have significantly decreased since the peak in 2012, their influence is still considerable, most notably in how they impact the region’s median sales price. During March 2015, distressed homes accounted for just 17.85% of all residential active listings, down 1.65% from the same period of time last year. March’s distressed homes accounted for 22.70% of all residential settled sales, a decrease of 1.84% from March.

Real Estate Trends to Watch in 2015

Courtesy of Yahoo Finance

 

Along with green shoots and chirping birds, one sure sign of spring is popping up in neighborhoods across the country: For Sale signs.

As the weather warms up, so does the housing market, and experts say this year’s spring selling season is shaping up to be an active one. Whether you’re buying or selling, here are the trends you need to know about.

1: Home prices are rising, even hitting record levels in some places. Home prices nationwide rose by 5.7 percent in January, compared to a year ago, with prices hitting record highs in Colorado, Texas, Wyoming, and New York.

Prices are so high in certain areas that some economists are starting to worry about localized bubbles. In most markets across the country, however, gains of around 5 percent are seen as stable, sustainable growth, a welcome change after years of roller coaster changes.

2: Mortgage rates are still low … for now. At less than 3.7 percent, mortgage rates are haven’t been this favorable to consumers since 2013. “Even though rates are expected to rise as the year progresses, for now these rates are really at very low levels,” says Greg McBride, chief financial analyst at Bankrate.com.

To be safe, once you’ve got a closing date, consider locking in your mortgage at today’s rock-bottom rates.

3: It’s still a seller’s market. Total housing inventory at the end of February increased 1.6 percent to 1.89 million existing homes for sale, but that’s still 0.5 percent less than a year ago. Unsold inventory is at a 4.6-month supply, giving sellers a slight advantage in today’s market. (A six-month supply is considered a healthy market.)

4: Buyers want turnkey properties. Even with tight inventory, buyers are looking for properties that are move-in ready and won’t require much more than a coat of paint. “Buyers don’t want to assume any risk with properties that need work, particularly first-time buyers with limited cash resources,” says Budge Huskey, chief executive officer at Coldwell Banker Real Estate.

5: Foreclosures are no longer a factor. After peaking in August 2006 just before the housing bubble burst, foreclosures are on pace to return to historic norms this year. Foreclosure filings fells 4 percent in February to their lowest level since 2006.

6: Investors are backing off. Ordinary buyers in recent years often found themselves competing with investors. “Today’s houses are getting less desirable for investors because price points are going higher, so it doesn’t pencil out as much,” says Daren Blomquist, RealtyTrac vice president. The share of homes going to institutional investors or all-cash buyers dropped in 2014 to the lowest level in four years.

7: In most places it’s much cheaper to buy than to rent. Soaring rents in recent years have made buying a home much more affordable for those who want to stay put than renting one. Nationally, U.S. renters spend an average of 30 percent of their income on rent, versus just 15 percent of income on mortgage payments.

8: Credit is getting looser. Fannie Mae and Freddie Mac have introduced new lending programs that allow borrowers to put just 3.5 percent down on a home – although this comes with risk, of course. The Federal Housing Finance Agency recently reduced the cost of mortgage insurance by half a percentage point, which will save home buyers an average of $900 per year. All of this makes it a little bit easier for first-time buyers to qualify for a home loan. “It’s still not easy to get a mortgage, but it’s not as hard as it was a couple of years ago,” says Bob Denk, an economist with the National Association of Home Builders.

9: New homes are smaller and greener. The average new home in 2015 was expected to be about 2,200 square feet, or 10 percent smaller than the average new home five years ago. Millennial buyers and downsizing boomers want a smaller carbon footprint and a more eco-friendly home with energy-efficient windows and plumbing.

 

Virginia Beach Real Estate Trends Continue to Show Market Growth

Courtesy of Trulia

Average Listing Price

  • $414,562
  • for week ending Jan 28
  • +$29,804
  • +7.7%

Average Price per sq feet: $147.00

Median Sales Price

  • $234,900
  • Oct ’14 – Jan ’15

Summary for Virginia Beach


Average price per square foot for Virginia Beach VA was $147, an increase of 5% compared to the same period last year. The median sales price for homes in Virginia Beach VA for Oct 14 to Jan 15 was $234,900 based on 553 home sales. Compared to the same period one year ago, the median home sales price increased 0%, or $100, and the number of home sales decreased 45.1%. There are currently 2,678 resale and new homes in Virginia Beach, including 12 open houses, as well as 667 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The average listing price for homes for sale in Virginia Beach VA was $414,562 for the week ending Jan 28, which represents an increase of 7.7%, or $29,804, compared to the prior week. Popular neighborhoods in Virginia Beach include Northwest and North Central, with average listing prices of $338,478 and $423,379.

2014 ends with Continued Growth in Hampton Roads Real Estate Market

Courtesy of REIN

The Hampton Roads real estate market ended on an encouraging note for 2014 with a burst of activity at the end of the year. Compared to the only moderate improvements throughout the year, December’s statistics posted relatively positive results year-over-year. Residential active listings, pending sales and settled sales all underwent significant increases when comparing December 2014 and 2013. The month’s strong marks also contributed to 4th quarter year-over-year advancements.

Residential active listings rose 6.24% when compared to December 2013. Of the region’s seven major cities (Chesapeake, Hampton, Newport News, Norfolk, Portsmouth, Suffolk, Virginia Beach) all experienced a year-over-year increase in the number of homes for sale. Chesapeake and Hampton saw the largest spikes at 15.79% and 12.92%, while Portsmouth exhibited the lowest increase at just .56%.

The region’s months’ supply of inventory for residential homes for sale is currently 5.92 months, up 8.62% from December 2013 when it was 5.45 months. Virginia Beach currently maintains only 4.59 months’ supply of inventory, the lowest of the seven major cities, while Hampton sports the highest at 7.28 months. Six months is considered a “balanced” market.

Hampton Roads’ residential pending sales for the month of December rose a substantial 23.03% as compared to the prior year. All seven of the region’s major cities improved by 15-37% year-over-year. Hampton and Newport News escalated the most at 37.23% and 35.14%. A significant increase in pending sales such as this should result in higher settled sales over the next few months, assuming all transactions conclude satisfactorily. Year-to-date, 2014 pending sales reflect an increase over last year, of 1.42% regionally.

December’s residential settled sales rose a considerable 12.70% when compared to December 2013. Of the region’s seven major cities all but Portsmouth experienced a year-over-year increase in the number of homes sold. Virginia Beach and Chesapeake experienced the largest surges at 21.65% and 18.92% respectively, while Portsmouth’s residential sales declined 8.18%. The region’s median sales price for December 2014 is $205,000, up 3.8% from the previous year when it was $197,500.

While not quite as dramatic an increase as for the month of December, residential settled sales were up 2.52% overall for fourth quarter 2014 (October through December), compared to the same period of time in 2013. Four of the region’s major cities improved year-over-year for Q4 (Norfolk 9.65%,Newport News 8.38%, Virginia Beach 6.03%, and Chesapeake 4.32%), with the remaining three cities experiencing a decrease in the number of pending sales (Portsmouth down 10.59%, Suffolk 8.5%, and Hampton 5.09%). The median sales price for Q4 rose 2.55% year-over-year, from $199,900 to $205,000, which coincidently is the same median sales price for the month of December. Closing the year, 2014 year-to-date settled sales experienced a slight drop as compared to 2013 with a decline of 2.22%.

Distressed homes, those that are either short sales or foreclosures, continue to have significantly less impact on the region’s market. During December 2014, distressed homes accounted for just 20.04% of all residential active listings, down 2.45% from the same period of time last year. December’s distressed homes accounted for only 21.53% of all residential settled sales, a decrease of 7.52% from December 2013. Compared to the 30-40% market share when distressed homes peaked in 2011 and 2012, this segment of properties persists in showing improvement.

December 2014 Summary

All Categories

December 2014

December 2013

Percent Change

Total Property Active Listings

12,904

12,397

4.09%

Total Residential Active Listings

10,450

9,836

6.24%

Total Property Pending Sales

1,714

1,429

19.94%

Total Residential Pending Sales

1,640

1,333

23.03%

Total Property Sales

1,948

1,786

9.07%

Total Residential Sales

1,890

1,677

12.7%

Total Residential New Construction Sales

255

229

11.35%

Median Residential Sales Price

$205,000

$197,500

3.8%

Months’ Supply of Inventory

5.92

5.45

8.62%

What Real Estate Trends to Expect in 2015

As housing recovers, prices in many markets across the U.S. have shot up. In fact, RealtyTrac reported that the median sale price of U.S. single-family homes and condos in October had reached its highest level since September 2008. Price appreciation and the lure of foreclosures created a feeding frenzy for real estate investors willing to pay cash and made it harder for traditional buyers to compete.

But experts say that 2015 will be marked by a return to normalcy and balance for real estate markets across the country. Stan Humphries, chief economist for Zillow.com, predicts that home value growth will slow to around 3 percent per year instead of the 6 percent seen recently, and that will make real estate less attractive to many investors. “It’s been a tough market for buyers,” he says. “I think it’s going to get easier in 2015. Negotiating power will move back to buyers and away from sellers. It will be a much more balanced market.” (Too many buyers and too little inventory, or the opposite, contribute to an unbalanced market.)

Redfin.com’s chief economist Nela Richardson agrees. “It’s been a clear pattern that the investor activity has been shrinking over time,” she says. “Investors like to go in where they can buy low and sell high. Price growth is starting to slow dramatically, so they can’t sell much higher than what they buy. Investment property is less compelling in 2014 going into 2015.”

For years, many people have postponed homeownership in favor of renting, but that may also change next year as a growing number of this generation starts families and seek more stability.

Baby boomers are also likely to make a move in 2015. With fewer homes underwater, they’re finally in a position to sell.

While mortgage rates may not remain at the historic lows seen recently, more people may qualify for home loans as issues like foreclosures or short sales age out of their credit reports and Freddy Mac and Fannie Mae ease mortgage eligibility. Freddy and Fannie recently announced a new mortgage program for buyers with a down payment as low as 3 percent.