2015-Q2 Virginia Home Sales Report

2011 2015

second second SECOND Quarter QUARTER Quarter

VIRGINIA VIRGINIA HomeSAleS SAleSRepoRt RepoRt Home

Analysis by the Virginia Center for Housing Research at Virginia Tech

速 速 Published Virginia association of reaLtors , the advocate Published by by Virginia association of reaLtors , the advocate for for estate professionals property owners in Virginia. realreal estate professionals andand property owners in Virginia.

Virginia Quarterly Home Sales Report

2015-Q2

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:

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 County, 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 County, Fairfax City, Falls Church City, Fauquier, Frederick, Fredericksburg City, King George, Loudoun, Madison, Manassas City, Manassas Park City, Orange, Page, Prince William, Rappahannock, Richmond County, Shenandoah, Spotsylvania, Stafford, Warren, Westmoreland, Winchester City Alleghany, Amherst, Appomattox, Bedford, Botetourt, Campbell, Covington City, Craig, Floyd, Franklin County, Giles, Lynchburg City, Montgomery, Pulaski, Radford, Roanoke County, 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

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 2

Virginia Quarterly Home Sales Report

2015-Q2

Second Quarter Market Summary The Virginia residential real estate market experienced its strongest second quarter since the 2008 recession, measured by both sales and sales volume.

June 2015 sales were the highest Virginia has experienced since the recession and surpassed 2007 June sales. Each region of Virginia experienced increased sales year-over-year, except for the Central Valley, which experienced a 1.1% decrease in sales.

Median sales price also increased year-over-year through most of the state.

Only the Hampton Roads/Chesapeake Bay region experienced a decrease in median price. Virginia, as a whole, experienced a 2.6% decrease in median sales price year-over-year. See page 9 for more details.

Virginia sales volume reached nearly $10.6 billion in the second quarter of 2015, 11% higher than sales volume in the second quarter of 2014. 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).

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Virginia Month-to-Month Sales Trends Single Family Homes, Townhomes, Condos 2012

2013

2014

2015

Number of Single Family, Townhome and Condo Sales

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Aug

Sep

Oct

Nov

Dec

Month

Jan

Feb

Mar

Apr

2012

5,068

5,775

7,213

7,698

2014

5,356

5,642

7,109

8,467

2013 2015

5,533 5,772

5,942 6,044

7,470 8,441

May

9,064

Jun

9,740

Jul

8,664

9,026

7,213

7,259

7,405

6,847

9,421

8,290

8,398

6,599

8,231

8,665

10,488 10,802 10,383 10,155

9,079

10,232 12,358

9,647

10,579 10,121

Dec

8,186

7,950

6,949

7,559

There were approximately 12,358 home sales in June 2015, 17% more sales than in June 2014. Sales were higher in each of the first six months of 2015 than in 2014, except for May. Sales increased dramatically in June, even surpassing 2007 June sales (11,198 homes were sold in June 2007). Sales increased 21% from May to June 2015, which is not typical for Virginia. Historic trends show that dramatic increases in sales in June can lead to dramatic decreases in July.

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Virginia Quarterly Residential Sales Single Family Homes, Townhomes, Condos

35,000

Number of Single Family, Townhome and Condo Sales

31,669

+10.13% YOY

29,962

30,000

28,757

28,728

28,008

26,502 24,911

25,000

23,386 22,458 21,509 20,257

20,000

18,056

18,910

18,153

15,000

10,000

2012-­‐Q1 2012-­‐Q2 2012-­‐Q3 2012-­‐Q4 2013-­‐Q1 2013-­‐Q2 2013-­‐Q3 2013-­‐Q4 2014-­‐Q1 2014-­‐Q2 2014-­‐Q3 2014-­‐Q4 2015-­‐Q1 2015-­‐Q2 Quarter

The pace of home sales was 10.13% higher in the second quarter of 2015 compared to the second quarter of 2014. High sales in June 2015 gave the quarter a boost, as sales in April and May of 2015 were relatively similar to the number of sales in April and May of 2014.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Virginia Annualized Residential Sales Single Family Homes, Townhomes, Condos

110,000

Number of Single Family, Townhome and Condo Sales

103,320 99,109

100,000

100,058 99,301

95,292 90,978 90,000 85,062

86,658

100,408

98,096

97,376

98,304

91,832

88,568

80,000

70,000

60,000

50,000

2012-­‐Q1 2012-­‐Q2 2012-­‐Q3 2012-­‐Q4 2013-­‐Q1 2013-­‐Q2 2013-­‐Q3 2013-­‐Q4 2014-­‐Q1 2014-­‐Q2 2014-­‐Q3 2014-­‐Q4 2015-­‐Q1 2015-­‐Q2 Quarter

Each data point on the graph above includes 12 months of home sales data ending in the quarter shown. For example, the 2015-Q2 figure (103,320 sales) includes home sales from July 2014 through June 2015. 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 2.9% from 2015-Q1 to 2015-Q2. The second quarter of 2015 was the third consecutive quarter of increase in this measure, after a steady decline from 2013-Q4 to 2014-Q3. Sustained growth in this measure is a good indication of improved long-term performance in the residential real estate market.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Regional Changes in Sales 2014-Q2 vs. 2015-Q2 Units

Northern Virginia +8.4% Central Valley -1.1%

Central Virginia +13.9%

Roanoke / Lynchburg / Blacksburg +13.9% Southwest Virginia +9.8%

Hampton Roads / Chesapeake Bay +11.5%

Southside Virginia +9.0%

Region

2014-Q2

2015-Q2

Change

Central Valley

1,748

1,729

-1.1%

Central Virginia

4,685

5,336

13.9%

Hampton Roads / Chesapeake Bay

6,325

7,054

11.5%

Northern Virginia

13,066

14,163

8.4%

Roanoke / Lynchburg / Blacksburg

2,216

2,525

13.9%

Southside Virginia

443

483

9.0%

Southwest Virginia

328

360

9.8%

All of Virginia

28,811

31,650

9.9%

Almost every region of the state experienced a higher pace of sales compared to the second quarter of 2014, with the exception of the Central Valley. Central Virginia, the Hampton Roads/Chesapeake Bay region and the Roanoke/Lynchburg/Blacksburg region experienced a relatively strong second quarter with approximate increases of 13.9%, 11.5%, and 13.9% respectively. The Central Valley experienced a small, 1.1% decrease in sales year-over-year, with 19 fewer sales in 2015-Q2 than in the second quarter of 2014.

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

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

$259,990

$244,467

$255,000

$259,000

$267,000 $235,000

$249,000

$269,900 $233,000

$241,000

$248,000

$249,500 $250,000

$215,000

Median Sales Price

$300,000

$254,000

$350,000

-2.63%

$200,000

4.20%

$150,000 2012-­‐Q1 2012-­‐Q2 2012-­‐Q3 2012-­‐Q4 2013-­‐Q1 2013-­‐Q2 2013-­‐Q3 2013-­‐Q4 2014-­‐Q1 2014-­‐Q2 2014-­‐Q3 2014-­‐Q4 2015-­‐Q1 2015-­‐Q2 Quarter

The median sales price in Virginia decreased 2.6% year-over-year to $259,990 in the second quarter of 2015. Over the longer term, the median sales price in Virginia increased 4.2% over the second quarter of 2012. Virginia prices remain fairly stable, despite very low days on the market, giving an indication that supply and demand remain in sync.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 8

Virginia Quarterly Home Sales Report

2015-Q2

Regional Changes in Median Sales Prices 2014-Q2 vs. 2015-Q2

Northern Virginia +0.5% Central Valley +4.5%

Central Virginia +5.7%

Roanoke / Lynchburg / Blacksburg +4.3% Southwest Virginia +9.6%

Region

Southside Virginia +7.5%

2014-Q2

Hampton Roads / Chesapeake Bay -5.4%

2015-Q2

Change

$219,000

5.7%

Central Valley

$220,000

$230,000

Hampton Roads / Chesapeake Bay

$213,500

$202,000

-5.4%

$168,000

4.3%

Central Virginia

Northern Virginia

Roanoke / Lynchburg / Blacksburg Southside Virginia

Southwest Virginia All of Virginia

$207,280 $388,038 $161,000 $80,000

$114,000

$267,000

$390,000 $86,000

$125,000

$259,990

4.5%

0.5% 7.5% 9.6%

-2.6%

Median sales prices stayed fairly stable throughout the state, with median price increases ranging from 4.3% in the Roanoke/Lynchburg/Blacksburg region to 7.5% in Southside Virginia and 9.6% in Southwest Virginia. The Hampton Roads/Chesapeake Bay region experienced a 5.4% decrease in median sales price. The overall decrease in sales prices in the Hampton Roads/Chesapeake Bay region contributed to the state-wide decrease because the Hampton Roads/Chesapeake Bay region experienced the second highest number of sales in Virginia (7,054 sales) and Northern Virginia, with the highest number of sales, experienced only a 0.5% increase in median sales price.

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 9

Virginia Quarterly Home Sales Report

2015-Q2

Virginia Quarterly Residential Sales Volume ($B) Single Family Homes, Townhomes, Condos

12

11

10.59 9.91

10

9.54

Billions of Dollars of Residential Sales

9.30

9.80

+11.1%

9

8.20 8

7.68

7

6.45

6

5

7.38 6.93 6.19 5.50

5.36

4.87

4

3

2

2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 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 second quarter of 2015 ($10.6B) increased 11% from the second quarter of 2014 ($9.5B). 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). Sales volume in the second quarter of 2015 was more than $2.0 billion greater than the second quarter of 2012 and $0.7 billion greater than the second quarter of 2013.

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 10

Virginia Quarterly Home Sales Report

2015-Q2

Virginia Price Distribution Of Residential Home Sales Single Family Homes, Townhomes, Condos 2014-Q2

106 101

$1.5M -­‐ $2M

-4.7% 457 465

$1M -­‐ $1.5M

1.8% 1,060 1,083

$750K -­‐ $1M

Price Range

18.6%

43 51

$2M +

2.2% 3,309

$500K -­‐ $750K 2,875

$400K -­‐ $500K

2015-Q2

3,719

3,299

12.4%

14.7% 4,512

$300K -­‐ $400K

5,261

16.6% 6,650

$200K -­‐ $300K

6,933

$100K -­‐ $200K 2,884 2,703

0 -­‐ $100K

0

7,584 7,403

14.0% 6.8%

-6.3%

500 1,000 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 second quarter, except for the $0-100K and $1.5-2M price range. Low sales in the $0-100K range may result from low market inventory in this category and/or higher financial barriers experienced by buyers in this market segment.

Sales increased 18.6% in the $2M and above price range. Changes in sales in the categories greater than $1M represent a very small number of sales. The percent change measure is less meaningful in these categories, given the small number of sales.

The $200K-750K price ranges also saw substantial increases in residential sales. These increases represent a large increase in the actual number of sales and reflect the overall increase in sales yearover-year. Increased sales were particularly substantial in the $300K-400K range.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Virginia Average Days On Market Single Family Homes, Townhomes, Condos

120

103

100

Average Days On Market

85

88

92

91

89

84

81

80

80 71

71

73

73

-6.8% YOY

68

60

40

20

0

2012-­‐Q1 2012-­‐Q2 2012-­‐Q3 2012-­‐Q4 2013-­‐Q1 2013-­‐Q2 2013-­‐Q3 2013-­‐Q4 2014-­‐Q1 2014-­‐Q2 2014-­‐Q3 2014-­‐Q4 2015-­‐Q1 2015-­‐Q2

Quarter

Days on the market decreased 6.8% year-over-year. Average time on the market decreased 24% from the first quarter of 2015 to an average of 68 days in the second quarter of 2015. Average days on the market was 62 in June 2015, lower than the June 2014 average of 65. Average days on the market typically begin to increase in July or August.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 12

Virginia Quarterly Home Sales Report

2015-Q2

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

UNITED STATES (Existing Home Sales*)

16,000

600,000

14,000 12,000

442,000 368,000

400,000

10,000 8,000

500,000

10,232 300,000

8,467

6,000

200,000

4,000 100,000

2,000 0

Apr-14

May-14

Jun-14

Jul-14

Aug-15

Sep-15

Oct-15

Nov-15

Dec-14 (p) Jan-15 (p) Feb-15 (p) Mar-15 (p) April-15 (p) May-15 (p)

0

The pace of Virginia home sales has been similar to the pace of sales in the United States as a whole throughout 2015, with the exception of the change from March to April. The United States, as a whole, and Virginia experienced a similar increase in sales from April to May.

Monthly Residential Median Sales Price UNITED STATES (Existing Home Sales*)

VIRGINIA (All MLS-Reported Home Sales*)

$350,000

$350,000

$300,000

$275,000

$257,000 $250,000

$300,000 $250,000

$230,300

$200,000

$200,000

$201,000 $150,000 $100,000

$150,000

Apr-14

May-14

Jun-14

Jul-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jan-15

Feb-15

Mar-15

April-15 (p)

May-15 (p)

$100,000

The monthly residential median sales price increased in Virginia from April to May at approximately the same rate as it increased in the United States as a whole. *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.

Published by the Virginia Association of REALTORS速 Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2015-Q2

Virginia Unemployment Rate Source: Bureau of Labor Statistics

7% 6%

6.0%

5.9%

6%

5.6%

5%

5.3%

5.5%

5.8% 5.4%

5.3%

5.2%

4.9%

4.8%

4.7%

2014-Q3

2014-Q4

2015-Q1

5% 4%

2012-Q2

2012-Q3

2012-Q4

2013-Q1

2013-Q2

2013-Q3

2013-Q4

2014-Q1

2014-Q2

4.9%

2015-Q2

2015-Q1 unemployment rate based on preliminary February 2015 data.

Unemployment rates by state, seasonally adjusted, May 2015 (U.S. rate = 5.5 percent)

9.0% and over 8.0% to 8.9% 7.0% to 7.9% 6.0% to 6.9% 5.0% to 5.9% SOURCE: Bureau of Labor Statistics Local Area Unemployment Statistics

4.0% to 4.9% 3.9% or below

Virginia’s unemployment rate increased in the second quarter of 2015 to 4.9% in May. The Virginia unemployment rate for June has not yet been released, but the U.S. unemployment rate decreased to 5.3% in June. The Virginia unemployment rate usually tracks the U.S. rate, while performing better overall, so the Virginia rate is likely to decrease or remain the same in June.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 14

Virginia Quarterly Home Sales Report

2015-Q2

Average 30-Year Mortgage Interest Rates Source: FreddieMac

4.6% 4.44%

4.4%

4.30%

4.2%

4.36%

4.23%

4.14%

4.0% 3.8%

3.97% 3.80%

3.6%

3.72%

3.69% 3.54%

3.4%

3.83%

3.50% 3.36%

3.2% 3.0%

2012-­‐Q2

2012-­‐Q3

2012-­‐Q4

2013-­‐Q1

2013-­‐Q2

2013-­‐Q3

2013-­‐Q4

2014-­‐Q1

2014-­‐Q2

2014-­‐Q3

2014-­‐Q4

2015-­‐Q1

2015-­‐Q2

3.0%

3.1%

2015-­‐Q1

2015-­‐Q2

Average 15-Year Mortgage Interest Rates Source: FreddieMac

3.6%

3.5%

3.4%

3.4%

3.4%

3.2% 3.0%

3.3%

3.3%

3.2%

3.0% 2.8%

2.8%

2.7%

2.6%

2.7%

2.9%

2.4% 2.2% 2.0%

2012-­‐Q2

2012-­‐Q3

2012-­‐Q4

2013-­‐Q1

2013-­‐Q2

2013-­‐Q3

2013-­‐Q4

2014-­‐Q1

2014-­‐Q2

2014-­‐Q3

2014-­‐Q4

Both 30-year and 15-year mortgage interest rates increased in each month of the second quarter of 2015. The June 30-year rate was 3.98% and the 15-year rate was 3.19%.

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 15