2011-Q3 Virginia Home Sales Report

速速 速 Published by Virginia association ofof reaLtors ,, the advocate for Published byby Virginia association reaLtors the advocate forfor Published Virginia association of reaLtors , the advocate real estate professionals and property owners inin Virginia. real estate professionals and property owners Virginia. real estate professionals and property owners in Virginia.

2011

Quarter Quarter

second THIRD second

VIRGINIA VIRGINIA Home HomeSAleS SAleSRepoRt RepoRt

Virginia Quarterly Home Sales Report

2011-Q3

Virginia Month-to-Month Sales Trends Single Family Homes, Townhomes, Condos 2008

2009

2010

2011

Number of Single Family, Townhome and Condo Sales

12,000

10,000

Virginia Month-to-Month Sales Trends Single Family Homes, Townhomes, Condos

8,000

2008

2009

2010

2011

Number of Single Family, Townhome andNumber Condo Sales of Single Family, Townhome and Condo Sales

12,0006,000

4,000

10,000 2,000

Virginia Month-to-Month Sales Trends

8,000

Single Family Homes, Townhomes, Condos

0 January

February

March

April

May

June

2008 12,000 6,000

July Month2009

August

September October

2010

November December

2011

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2008

4,823

5,776

7,325

8,047

8,881

9,742

9,474

8,894

8,072

7,418

5,543

6,680

2009

4,758

5,391

6,740

7,212

8,096

9,849

9,593

8,545

8,018

8,384

7,892

6,573

2010

4,562

4,892

7,087

8,337

8,903

10,493

7,137

7,210

6,427

6,035

6,010

6,468

4,699

5,105

7,081

6,649

8,081

9,120

7,867

7,998

6,640

10,000 2011 4,000

Residential home sales in Virginia increased significantly during the third quarter of 2011 as compared to 2010. Sales increased 8,000 2,000 by 10% in July, 11% in August and 3% in September. In many ways, this is a welcome positive trend in the residential home sales market. Third quarter home sales increased 8% over 2010.

▲10%

6,000 It is0important to realize, however, that home sales during the third quarter of last year were in some April ways artifically January February March May deflated June July by the federal home buyer tax credits that were available to homeMonth

▲11%

▲3%

August

September October

buyers during the first six months of 2010. When these tax credits expired, the real estate market 4,000 slowed considerably -- and that slowing took place in the third and fourth quarters of 2010.

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2,000

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N

Virginia Quarterly Home Sales Report

2011-Q3

Virginia Quarterly Residential Sales Single Family Homes, Townhomes, Condos 30,000 27,733 26,440

26,156 25,157

Number of Single Family, Townhome and Condo Sales

25,000

23,850 22,849

22,505 20,774

20,000

19,641 18,513 16,889

16,541

16,885

15,000

10,000

5,000

0 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 Quarter

Virginia residential home sales showed a strong improvement (+8%) between the third quarter of 2010 (20,774 sales) and the third quarter of 2011 (22,505). Some will note that this comparative increase in home sales during the third quarter of 2011 may partially be the result of abnormally low sales during the third quarter of 2010. The federal home buyer tax credit ended mid-2010, resulting in a slower third quarter last year.

As we conclude 2011 and head into 2012, Virginia’s housing market will likely be strengthened by low interest rates, rising residential rental rates, pent-up demand, and an improving household balance sheet based on increases in household saving habits.

Despite these tailwinds, however, a return to stability in the housing market may be slowed by employment trends, low consumer confidence, tight lending and underwriting standards and significant policy issues. Recent policy decisions or discussions that could impact Virginia’s housing market include a possible elimination of the mortgage interest deduction, GSE reform, changes in FHA loan limits and a new QRM proposal (Qualified Residential Mortgage) that would require lenders to retain 5 percent of the value of the loans they originate (excluding Fannie and Freddie) unless the borrowers have a 20% down payment.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Annualized Residential Sales Single Family Homes, Townhomes, Condos 100,000

95,000

93,279

Number of Single Family, Townhome and Condo Sales

90,894 90,000

90,675

89,640

91,051 88,127

90,703 87,897

87,843

85,000

83,561

83,905 81,753 80,022

80,000

75,000

70,000

65,000

60,000

55,000

50,000 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 Quarter

Each data point on the graph above includes 12 months of home sales data, thus the 2011-Q3 figure includes home sales from 2010-Q4 through 2011-Q3. Using this rolling sum of home sales can provide a clearer indicator of the trends we are seeing in Virginia’s housing market.

The annualized rate of home sales in Virginia has only fallen 10% over the past three years, which overall, is not a significant decline. The federal home buyer tax credit in late 2009 and early 2010 started to breathe life back into the real estate market, but buyer activity quickly faded in the 3rd (and then 4th) quarter of 2010 after that incentive had passed.

Of note, the annualized pace of home sales has increased over the past three months, from 80,022 sales in the second quarter of 2011 to 81,753 sales in the third quarter of 2011.

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Virginia Quarterly Home Sales Report

2011-Q3

Regional Changes in Sales 2010-Q3 vs. 2011-Q3 Units

Northern Virginia -2.1% Central Valley +10.3%

Greater Richmond +16.5% Roanoke / Lynchburg / Blacksburg +25.5% Southwest Virginia +44.6%

Hampton Roads / Chesapeake Bay +18.9%

Southside Virginia +29.3%

Region

2010-Q3

2011-Q3

Change

Central Valley

1,050

1,158

+10.3%

Greater Richmond

2,878

3,353

+16.5%

Hampton Roads / Chesapeake Bay

4,383

5,211

+18.9%

Northern Virginia

10,468

10,245

-2.1%

Roanoke / Lynchburg / Blacksburg

1,403

1,761

+25.5%

Southside Virginia

324

419

+29.3%

Southwest Virginia

242

350

+44.6%

Nearly every region in Virginia witnessed an increase in the pace of home sales when comparing the third quarter of 2011 to the third quarter of 2010. Increases in the pace of home sales ranged from 10% in the Central Valley to an increase of 45% in Southwest Virginia. The Northern Virginia area was the only area showing a (slight) decrease in home sales -- of 2.1% as compared to one year ago.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Median Residential Sales Price Single Family Homes, Townhomes, Condos

$235,000

$234,900 $210,000

$233,000

$249,900

$239,900

$225,000

$225,839

$229,900

$229,900

$229,000

$216,000

Median Sales Price

$250,000

$246,500

$300,000

$200,000

$150,000

$100,000 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 Quarter

Home values in Virginia inched slightly upward in the third quarter of 2011 to a median price of $235,000. If we put this into the context of 2009 home sales we find that home sales prices also stayed quite stable between the second quarter and third quarter of 2009.

Home values in Virginia have only fallen 4.6% percent over the past three years, which is extraordinary, given the larger adjustments in home values seen in some other parts of the country.

We will likely not see an increase in median home values until we start to see an overall increase in buyer demand via an increased pace of home sales. It is encouraging, however, to see that the median sales price has remained relatively steady over the past several months after a significant increase over the first quarter of this year.

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Virginia Quarterly Home Sales Report

2011-Q3

Regional Changes in Median Sales Prices 2010-Q3 vs. 2011-Q3

Northern Virginia +1.1% Central Valley -7.2%

Greater Richmond -6.0% Roanoke / Lynchburg / Blacksburg -6.1% Southwest Virginia -5.2%

Hampton Roads / Chesapeake Bay -9.8%

Southside Virginia +15.9%

Region

2010-Q3

2011-Q3

Change

Central Valley

$215,600

$200,000

-7.2%

Greater Richmond

$197,250

$185,471

-6.0%

Hampton Roads / Chesapeake Bay

$221,715

$200,000

-9.8%

Northern Virginia

$322,500

$326,000

+1.1%

Roanoke / Lynchburg / Blacksburg

$165,000

$154,950

-6.1%

Southside Virginia

$82,000

$95,000

+15.9%

Southwest Virginia

$121,300

$115,000

-5.2%

Northern Virginia continues to see gradual growth in home values with a 1% increase as compared to median home values one year prior. Southside Virginia also has seen stability in pricing with a 16% increase, even though that leaves their new median home value at just $95,000.

All other areas of Virginia witnessed declines in median home values from a decline of 5.2% (Southwest Virginia) to a more significant decline of 9.8% in the Hampton Roads / Chesapeake Bay region of Virginia.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Quarterly Residential Sales Volume Single Family Homes, Townhomes, Condos 9,000

8,000

8,198

8,005 7,625 7,182

7,033

7,000 Millions of Dollars of Residential Sales

6,411 6,000

6,621

6,402

5,585

5,433

5,000 4,416

4,553

4,479

4,000

3,000

2,000

1,000

0 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 Quarter

This graph illustrates the number of millions of dollars of real estate sold during each quarter over the past three years. Virginia’s housing market has seen a 17% decline in residential sales volume over the past three years. This decline is based not just on the lower number of homes being sold over time, but also the price adjustments during the same time. The decline has been more modest in recent history, with an actual increase between the second quarter of 2011 and the end of the third quarter of 2011.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Average Days On Market Single Family Homes, Townhomes, Condos 120 108 103 100

99

100 96 91 87

84

91

86 79

80

Average Days On Market

92

81

60

40

20

0 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3 Quarter

When looking at a three year history, the average time to market and sell a house has not experienced much of a change – from an average of 99 days in the third quarter of 2008 to 91 days in the third quarter of 2011. The average speed of home sales has in fact increased. Of note, this metric of average days on market did dip remarkably low to only 79 days on the market in second quarter 2010 – again, timed with two of the expirations dates of the federal home buyer tax credit.

The fact that the average days on market continues to decline is an indication that we may be headed towards better times in Virginia’s housing market.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Price Distribution Of Residential Home Sales Single Family Homes, Townhomes, Condos 2010-Q3 34 -26% 25

$2M +

54 +15% 62

$1.5M - $2M

258 -10% 232

$1M - $1.5M

561 +12% 628

$750K - $1M

Price Range

2011-Q3

2,124 -2% 2,075

$500K - $750K

1,764 +5% 1,847

$400K - $500K

3,213 -2% 3,137

$300K - $400K

4,901 +5% 5,165

$200K - $300K

5,612

$100K - $200K

+14% 6,420

2,230

0 - $100K

2,914 0

1,000

+31%

2,000 3,000 4,000 5,000 Number of Single Family, Townhome and Condo Sales

6,000

7,000

Home sales in Virginia in all price ranges under $300,000 showed an increase in the third quarter of 2011 as compared to one year prior in the third quarter of 2010. This is an important indicator of market stabilization, as most often these lower price ranges must recover first in order to have buyers then move up to their next home.

Examining all price ranges, there was hardly a price range that witnessed a significant decrease in home sales. The $1M - $1.5M range saw a 10% decline in sales, and sales of homes over $2M decreased by 26%.

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Virginia Quarterly Home Sales Report

2011-Q3

Regional Changes in Foreclosures 2011-Q2 vs. 2011-Q3

Northern Virginia +1.8% Central Valley +28.6%

Greater Richmond +13.9% Roanoke / Lynchburg / Blacksburg +19.4% Southwest Virginia -43%

Hampton Roads / Chesapeake Bay -4.3%

Southside Virginia +21.7%

Region

2011-Q2

2011-Q3

Change

Central Valley

308

396

+28.6%

Greater Richmond

2,060

2,347

+13.9%

Hampton Roads / Chesapeake Bay

3,426

3,279

-4.3%

Northern Virginia

5,744

5,850

+1.8%

Roanoke / Lynchburg / Blacksburg

397

474

+19.4%

Southside Virginia

198

241

+21.7%

Southwest Virginia

142

81

-43.0%

All of Virginia

12,275

12,668

+3.2%

Overall, Virginia witnessed an increase in foreclosures when comparing the third quarter of 2011 to the second quarter of 2011. It is important to note that some areas (Hampton Roads / Chesapeake Bay, Southwest Virginia) continued to see declines (-4.3%, -43%) in foreclosure rates despite the fact that other areas experienced an increase in foreclosures.

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Virginia Quarterly Home Sales Report

2011-Q3

Monthly Residential Sales VIRGINIA (All MLS-Reported Home Sales)

UNITED STATES (Existing Home Sales) 700,000

16,000 14,000 12,000 10,000

502,000

500,000

414,000

400,000

8,000 6,000

600,000

7,998

7,210

300,000 200,000

4,000

100,000

2,000 0

0 Aug-10

Sep-10

Oct-10

Nov-10

Dec-10

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

The monthly variation in the pace of home sales is relatively consistent in Virginia as compared to the entire United States. Both Virginia and the United States experienced a decline in home sales between June 2011 and June 2011 and then increased again in August 2011. Based on data from one year ago, we will likely now see a decline in the price of home sales for the next several months.

Monthly Residential Median Sales Price VIRGINIA (All MLS-Reported Home Sales)

UNITED STATES (Existing Home Sales)

$300,000

$240,000

$250,000

$239,000

$250,000

$220,000 $200,000

$200,000

$180,000

$150,000 $177,300

$168,300

$160,000 $140,000

$100,000

$120,000

$50,000

$100,000 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11

Feb-11 Mar-11 Apr-11 May-11 Jun-11

Jul-11

Aug-11

While median home prices have declined in both Virginia and the United States over the past year (August 2010 to August 2011), it seems that home values may be recovering in Virginia more quickly than in the United States as a whole. The United States median sales price declined by 5.2% over the past year while the Virginia median sales price decreased by only 4.4%.

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Virginia Quarterly Home Sales Report

2011-Q3

Virginia Unemployment Rate Source: Bureau of Labor & Statistics 8% 7%

6.7%

7.2%

6.9%

7.0%

7.4%

7.0%

6%

6.4%

6.3%

6.0%

5.1%

5% 4%

6.5%

4.0%

4.0%

3% 2% 2008-Q2 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2

Unemployment Rates By State seasonally adjusted, August 2011 (U.S. rate = 9.1 percent)

14.0% and over 12.0% to 13.9% 10.0% to 11.9% 8.0% to 9.9% 6 0% tto 77.9% 6.0% 9% 4.0% to 5.9% SOURCE: Bureau of Labor Statistics Local Area Unemployment Statistics

3.9% or below

Virginia’s unemployment rates have been steadily declining for more than a year now, from 7.4% in the first quarter of 2010 down to the current level of 6.0%. While it may be quite some time until Virginia reaches returns to an unemployment rate as low as 4.0% (as in 2008-Q2), it is encouraging news that an increasing number of Virginians are employed, as this bodes well for further stability and recovery in Virginia’s housing market. Of note, Virginia continues to fare quite well as compared to other states across the United States, as only nine states have lower unemployment rates than Virginia.

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Virginia Quarterly Home Sales Report

2011-Q3

Average 30-Year Mortgage Interest Rates Source: FreddieMac 6.5% 6.0%

6.0%

5.5%

5.4%

5.3%

5.0%

5.1%

5.0%

4.9%

5.0%

4.5%

4.7%

4.7%

4.9% 4.5%

4.4%

4.0%

4.0% 3.5% 3.0%

2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3

Average 15-Year Mortgage Interest Rates Source: FreddieMac 6.0% 5.5% 5.0% 4.5%

5.6% 5.0%

4.9% 4.6%

4.5%

4.0%

4.4%

4.3%

4.2%

4.1% 3.8%

3.5%

4.1% 3.7% 3.3%

3.0% 2008-Q3 2008-Q4 2009-Q1 2009-Q2 2009-Q3 2009-Q4 2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011-Q1 2011-Q2 2011-Q3

Mortgage interest rates have remained extraordinarily low over the past three years --- with 30 year rates dipping down to only 4.0% during the past several months, and the average 15 year rate falling to only 3.3% in the second qutarter of 2011. Interest rates will likely stay below 6% for the foreseeable future, though they may start to increase as we continue throughout 2011.

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Virginia Quarterly Home Sales Report

2011-Q3

The Virginia Association of REALTORS® (VAR) is the business advocate for real estate professionals in Virginia. VAR represents more than 29,000 REALTORS active in all phases of real estate brokerage, management, development and appraisal. Our mission is to enhance our membership’s ability to achieve business success.

All inquiries regarding this report should be directed to: Stacey Ricks, Director of Public Relations Virginia Association of REALTORS® 10231 Telegraph Road, Glen Allen, VA 23059 (804) 249-5716 Stacey@VARealtor.com www.VARealtor.com/HomeSales

Economic Regions

Central Valley: Greater Richmond:

Hampton Roads / Chesapeake Bay:

Northern Virginia:

Roanoke / Lynchburg / Blacksburg:

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

Southside Virginia:

Brunswick, Charlotte, Danville City, Emporia City, Galax City, Greensville, Halifax, Henry, Lunenberg, Martinsville City, Mecklenburg, Norton City, Patrick, Pittsylvania

Southwest Virginia:

Bland, Bristol City, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, Wythe

Information sourced from multiple listing services across the state with data compiled by R E Stats Inc. All information is deemed reliable but is not guaranteed. Figures might not match those reported elsewhere.

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