Virginia HOME SALES REPORT Q1 2017
Published by the Virginia REALTORS®, the advocate for real estate professionals and property owners in Virginia.
2017 First Quarter
The Virginia REALTORS® association 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 REALTORS®. All data may be used with citation to the proprietary owner, the Virginia REALTORS®. The data presented is based on specific economic regions comprised of counties and independent cities in Virginia, as detailed in the map below. It should be noted that these regions do not necessarily align with the counties and cities that comprise the 28 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® (NVAR). Please take this into consideration when referencing regions.
Central
Eastern Hampton Roads
Northern
Southside
Southwest
Valley
West Central
Albemarle, Amelia, Buckingham, Caroline, Charles City, Chesterfield, Culpeper, Cumberland, Dinwiddie, Fluvanna, Goochland, Greene, Hanover, Henrico, King & Queen, King William, Louisa, Madison, Nelson, New Kent, Orange, Powhatan, Prince George, Rappahannock, Sussex; Charlottesville, Colonial Heights, Hopewell, Petersburg, Richmond Accomack, Essex, King George, Lancaster, Middlesex, Northampton, Northumberland, Richmond, Westmoreland Gloucester, Isle of Wight, James City, Mathews, Surry, York; Chesapeake, Franklin, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford, Warren; Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, Manassas Park Brunswick, Charlotte, Greensville, Halifax, Henry, Lunenburg, Mecklenburg, Nottoway, Patrick, Pittsylvania, Prince Edward, Southampton; Danville, Emporia, Martinsville Bland, Buchanan, Carroll, Dickenson, Floyd, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, Wythe; Bristol, Galax, Norton Alleghany, Augusta, Bath, Frederick, Highland, Page, Rockbridge, Rockingham, Shenandoah; Buena Vista, Covington, Harrisonburg, Lexington, Staunton, Waynesboro, Winchester Amherst, Appomattox, Bedford, Botetourt, Campbell, Craig, Franklin, Giles, Montgomery, Pulaski, Roanoke; Lynchburg, Radford, Roanoke, Salem
Published by the Virginia REALTORS® Data recorded April 12, 2017
1
2017 First Quarter
First Quarter Summary The first quarter of 2017 indicates a year of continued growth in Virginia’s residential real estate market. With particularly strong sales in March and prices rising consistently on high buyer motivation, performance in the first quarter of 2017 rose notably from the same period in 2016. Quarterly transactions rose by 7.8 percent year‐over‐year (from 21,213 to 22,859). Likewise, first quarter volume jumped by 12.2 percent year‐over‐year, from $6.492 billion in 2016 to $7.287 billion in 2017. The significant increase in volume was the result of notable outperformance in pace, or number of sales, multiplied by rising prices. Statewide, median price for the first quarter rose by 4 percent from 2016 to 2017, from $249,900 to $260,000. Annualized sales, the sum of all sales for the preceding twelve months, offered a clear illustration of market strength, rising for the tenth consecutive quarter. The average quarterly increase in annualized sales over that time has been 1.9 percent, suggesting that if the trend continues, the annualized figure at the end of 2017’s second quarter could exceed 121,000 sales. Year‐over‐year, first quarter home sales increased in all price bands except the lowest ($0 to $100,000), where limited inventory typically restricts market activity. The increases were significant in every category except the $100,000 t0 $200,000 range. Luxury sales, above $750,000, increased by the greatest percentages, but because that range represents relatively few sales, the greatest indicator of overall market performance is in middle price bands. Year‐over‐year, sales and median price increased in every region of the state in the first quarter. The Eastern and Southwest regions exhibited particular gains over their prior year performance. Though 30‐year and 15‐year fixed mortgage interest rates remain at enticing lows, they each jumped notably from the two preceding quarters. Responding to the Federal Reserve Bank’s decision to raise the key rate in March, in quick succession to its December hike, average rates for 30‐year and 15‐year fixed mortgage interest rates in the first quarter rose to 4.17 percent and 3.39 percent, respectively. The anticipation of continuing rate increases contributes to buyer motivation and should spur activity, particularly as greater inventory comes available for buyers to absorb while rates remain relatively low.
Published by the Virginia REALTORS® Data recorded April 12, 2017
2
2017 First Quarter
Month‐to‐Month Sales Trends Number of Single Family, Townhome, and Condo Sales
Single Family Homes, Townhomes, Condos 2014
2015
2016
2017
15,000
12,500 9,740
10,000
7,500
6,464
6,655
Jan
Feb
5,000
2,500
2014
Jan
Feb
Mar
Mar
Apr
Apr
May
May
June
July
Aug
Sep
Oct
Nov
Dec
June
July
Aug
Sep
Oct
Nov
Dec
5,427
5,705
7,150
8,507
9,701
10,633
10,176
9,486
8,360
8,448
6,662
8,306
2015
5,807
6,087
8,521
9,171
10,370
12,684
11,824
10,205
9,567
8,872
7,020
8,745
2016
5,946
6,577
8,690
10,209
11,786
13,300
11,536
11,779
10,143
9,017
8,607
9,089
2017
6,464
6,655
9,740
Each month of the first quarter in 2017 had higher sales than in the corresponding months of the previous year. In particular, March sales (9,740) were markedly higher than their prior year benchmark, increasing 12.1 percent from March 2016 (8,690). Pace typically rises each month following January, leading into peak summertime sales. The dramatic month‐to‐month jump at the end of the 2017 first quarter reflects loosened inventory in March following prolonged constraints. For the previous three years, the February to March increase averaged 32.5 percent; for 2017, it was 46.4 percent.
Published by the Virginia REALTORS® Data recorded April 12, 2017
3
2017 First Quarter
Quarterly Residential Sales Single Family Homes, Townhomes, Condos Number of Single Family, Townhome, Condo Sales
40,000 35,295 35,000
32,225 31,596 28,841 28,022
30,000
26,713 24,637
23,416
25,000
22,859
21,213
20,415 20,000
33,458
18,282
15,000 10,000
7.8 %
5,000 0 2014 Q1
2014 Q2
2014 Q3
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
Sales in the first quarter of 2017 grew by 7.8 percent year‐over‐year, from a total of 21,213 in 2016 Q1 to 22,859. Relative to the first quarter of 2015, sales for the first quarter of 2017 rose 12 percent (from 20,415 transactions). Further indicated through the annualized sales trend (page 5), year‐ over‐year improvements in quarterly performance indicate sustained market expansion. Note: the horizontal bar in the graph indicates the variance in first quarter sales from 2014 through 2017, beginning with 18,282 sales in 2014 and rising eventually to 22,859 sales in 2017, with graduated increases for each year in between. 2017 first quarter sales were 25 percent higher than their 2014 benchmark.
Published by the Virginia REALTORS® Data recorded April 12, 2017
4
2017 First Quarter
Annualized Residential Sales Number of Single Family, Townhome, and Condo Sales
Single Family Homes, Townhomes, Condos 130,000 120,000 110,000 100,000 7.9 %
90,000 80,000 70,000 2014 Q1
2014 Q2
2014 Q3
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
Each data point on the graph above represents twelve months of home sales data ending in the quarter shown. For example, the 2017 Q1 figure (118,325 sales) includes home sales from April 2016 through March 2017, and the 2016 Q4 figure (116,679 sales) includes home sales from January 2016 through December 2016. This rolling sum of home sales reduces seasonal effect, providing a clearer indicator of long‐term trends in Virginia’s housing market. The trend of continued improvement in this measure illustrates how Virginia’s residential real estate market has grown consistently over the long‐term. Annualized sales ending in the first quarter of 2017 grew 1.4 percent from the previous quarter. Year‐over‐year, the measure grew 7.9 percent. Indicating that growth has been sustained regardless of seasonal market fluctuations, annualized sales have grown for ten consecutive quarters. The average growth per quarter over that time period has been 1.9 percent. This suggests that, if remaining on trend, the annualized sales figure ending in the second quarter of 2017 may approach 121,000 sales.
Published by the Virginia REALTORS® Data recorded April 12, 2017
5
2017 First Quarter
Regional Changes in Sales 2015 Q4 vs. 2016 Q4 Units +7.1 %
+2.2 %
+10.9 % +12.9 %
+8.2 % +16.8 %
+28.3 %
+2.9 %
Region Central
2016 Q1 4,343
2017 Q1 4,905
12.9%
Eastern
386
428
10.9%
Hampton Roads
5,169
5,320
2.9%
Northern
7,762
8,313
7.1%
Southside
435
558
28.3%
Southwest
316
369
16.8%
Valley
1,078
1,102
2.2%
West Central
1,711
1,851
8.2%
Other
13
13
0%
ALL of Virginia
21,213
22,859
7.8%
The chart above compares 2016 first quarter sales to 2017 first quarter sales, by region. All regions experienced notable growth from the same period last year, for a statewide aggregate jump of 7.8 percent. The greatest year‐over‐year percentage increases occurred in the Southside and Southwest regions. Performance metrics are relative to the absolute number of sales, so less dense regions with increasing sales may show a relatively higher growth percentage. Two of the densest regions – Northern and Central – gained notably as well.
Published by the Virginia REALTORS® Data recorded April 12, 2017
6
2017 First Quarter
Median Residential Sales Price
260,000
265,000
272,000
279,000
249,900
255,000
265,000
274,950
247,500
251,000
260,000
267,000
235,000
249,000
300,000 250,000
4.0 %
150,000
200,000
Median Sales Price
350,000
Single Family Homes, Townhomes, Condos
5.1 %
2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
In comparison to the first quarter of 2016, aggregate median price rose by 4 percent for the first quarter of 2017. Relative to the first quarter of 2015, median price rose by 5.1 percent. Price rises have been spurred by increased buyer confidence, with demand consistently exceeding supply. Reflecting typical seasonal trends, median price fell relative to the fourth quarter of 2017 by 1.9 percent, from $265,000 to $260,000. A decline in price from the fourth to first quarters is expected as activity is usually slowest in January and February each year.
Published by the Virginia REALTORS® Data recorded April 12, 2017
7
2017 First Quarter
Regional Changes in Median Sales Price 2015 Q4 vs. 2016 Q4 2.5%
+15.4
+5.1 % +8.0 % +4.7 % +14.7
+1.1 %
+4.8 %
Region Central
2016 Q1 $212,000
2017 Q1 $228,950
8.0%
Eastern
$171,150
$197,450
15.4%
Hampton Roads
$210,000
$220,000
4.8%
Northern
$390,000
$399,900
2.5%
Southside
$89,000
$90,000
1.1%
Southwest
$100,250
$115,000
14.7%
Valley
$179,900
$189,000
5.1%
West Central
$154,800
$162,000
4.7%
Other
$110,000
$74,000
‐32.7%
ALL of Virginia
$249,900
$260,000
4.0%
Median sales price increased year‐over‐year in every region, with particularly strong performance in the Eastern and Southwest regions. Because ‘Other’ sales represent so few transactions, there is greater variance in price movement for each reporting period.
Published by the Virginia REALTORS® Data recorded April 12, 2017
8
2017 First Quarter
Quarterly Residential Sales Volume ($B) Single Family Homes, Townhomes, Condos $14
Billions of Dollars of Residential Sales
$12 $10 $8 $6 $4 12.2 %
$2 $0 2014 Q1
2014 Q2
2014 Q3
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
This graph represents the dollar value of residential real estate sold (in billions) during each quarter for the last three years. The volume of real estate sold in the first quarter of 2017 rose by 12.2 percent year‐0ver‐year, from $6.492 billion to $7.287 billion. Volume is amplified year‐over‐year by increases in both price and the number of transactions. Because the first quarter of 2017 saw a significant increase in pace alongside steadily rising median price, volume rose significantly on the strength of both contributing factors.
Published by the Virginia REALTORS® Data recorded April 12, 2017
9
2017 First Quarter
Price Distribution of Residential Home Sales Single Family Homes, Townhomes, Condos 2016‐Q1 327 404
$1 M+
23.5 %
522 662
$750 K ‐ $1M
26.8 %
2,110 2,351
$500K ‐ $750K Price Range
2017‐Q1
1,981 2,187
$400K ‐ $500K
11.4% 10.4 %
3,175
$300K ‐ $400K
3,669
15.6 %
5,171
$200K ‐ $300K
5,770 11.6 %
5,478 5,560
$100K ‐ $200K 2,449 2,256
0 ‐ $100K 0
1,000
2,000
1.5 %
‐7.9 %
3,000
4,000
5,000
6,000
7,000
Year‐0ver‐year home sales increased in every price category except the lowest ($0 to $100K), where restricted inventory limits the number of sales possible. Growth was particularly strong in the ranges from $200k to $400k.
Market Share for Price Bands
Because sales in ranges below $750,000 represent the vast majority of transactions in Virginia, they are the clearest indicator of market performance. The highest number of transactions by price band in 2017 Q1 happened in the $200k to $300k range.
2.9% 1.8%
0 ‐ $100K 10.3%
9.9%
$100K ‐ $200K $200K ‐ $300K
9.6%
$300K ‐ $400K
24.3%
$400K ‐ $500K 16.1%
$500K ‐ $750K $750 K ‐ $1M
25.2%
$1 M+
Published by the Virginia REALTORS® Data recorded April 12, 2017
10
2017 First Quarter
Average Days on the Market Single Family Homes, Townhomes, Condos
Average Days on the Market
120
90
89
84 73
81
78
73
68
68
83 74
68
63
69 61
60 ‐10.8 %
30
0 2013 Q4
2014 Q1
2014 Q2
2014 Q3
2014 Q4
2015 Q1
2015 Q2
2015 Q3
2015 Q4
2016 Q1
2016 Q2
2016 Q3
2016 Q4
2017 Q1
The average number of days on the market in the first quarter of 2017 decreased from the same quarter last year by 10.8 percent. Declining days on the market reflect sustained demand and reaction to the realization of rate increases, as buyers transact with increasing urgency. Typical of industry seasonality, average time on the market lengthened from the fourth quarter to the first, reflecting the slower activity in January and February.
Published by the Virginia REALTORS® Data recorded April 12, 2017
11
2017 First Quarter
Monthly Residential Sales VIRGINIA (All MLS‐Reported Home Sales*)
UNITED STATES (Existing Home Sales*)
16,000
600,000
14,000 12,000
500,000
421,000
400,000
10,000 8,000
9,740 8,690
6,000
300,000 200,000
4,000 100,000
2,000
0
0
The changes in the pace of Virginia home sales in the first quarter have tracked the changes in the pace of sales in the United States as a whole. National existing homes sales figures have not yet been released for March 2017.
Monthly Residential Median Sales Price UNITED STATES (Existing Home Sales*)
VIRGINIA (All MLS‐Reported Home Sales*)
$330,000 $280,000
$264,975
$251,930
$230,000 $180,000
$221,500
$130,000 $80,000 Feb‐16 Mar‐16 Apr‐16 May‐16 Jun‐16
Jul‐16
Aug‐16 Sep‐16
Oct‐16 Nov‐16 Dec‐16
Jan‐17
Feb‐17 Mar‐17
Virginia median price changes were similar to the changes in the median of existing‐home sales prices nationally for the first quarter of 2017. Both Virginia and the United States as a whole showed year‐0ver‐year increases in median price. National median price has not yet been released for March 2017. *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 the National Association of REALTORS®. Existing sales do not include newly constructed homes sold for the first time.
Published by the Virginia REALTORS® Data recorded April 12, 2017
12
2017 First Quarter
Virginia Unemployment Rate Source: Bureau of Labor Statistics 6.0% 5.5% 5.0%
5.3%
5.1%
4.9%
4.5%
4.8% 4.5% 4.2%
4.0%
4.2%
4.1% 3.7%
3.5%
3.9%
4.1%
3.9%
3.0% 2014‐Q2 2014‐Q3 2014‐Q4 2015‐Q1 2015‐Q2 2015‐Q3 2015‐Q4 2016‐Q1 2016‐Q2 2016‐Q3 2016‐Q4 2017‐Q1
The Virginia unemployment rate fell in the first quarter to seasonally‐adjusted 3.9 percent. Virginia unemployment continues to track below the national average (4.7 percent). Low unemployment is correlated with bolstered consumer confidence. At the national level, a strong first quarter jobs report contributed to the Federal Reserve Bank’s enactment of an increase in the key rate.
Published by the Virginia REALTORS® Data recorded April 12, 2017
13
2017 First Quarter
Average 30‐Year Mortgage Interest Rates Source: FreddieMac 4.60% 4.36% 4.23%
4.20%
4.17%
4.14% 3.97%
3.95% 3.83%
3.80%
3.90%
3.81%
3.74%
3.72%
3.59% 3.45%
3.40% 3.00% 2014‐Q1
2014‐Q3
2015‐Q1
2015‐Q3
2016‐Q1
2016‐Q3
2017‐Q1
Average 15‐Year Mortgage Interest Rates Source: FreddieMac 3.60% 3.40%
3.40%
3.32%
3.20%
3.39% 3.27% 3.18%
3.00%
3.01%
3.15%
3.06%
3.13%
3.07%
3.03% 2.85%
2.80%
2.75%
2.60% 2.40% 2.20% 2014‐Q1
2014‐Q3
2015‐Q1
2015‐Q3
2016‐Q1
2016‐Q3
2017‐Q1
Though still offering enticing financing opportunity, 30‐year and 15‐year fixed mortgage interest rates increased notably in the first quarter of 2017. The Federal Reserve Bank announced a widely anticipated rate hike in mid‐March, acting on strong labor data. The quarterly average of the 30‐ year fixed mortgage interest rate reached its highest point since the third quarter of 2014, and the 15‐year reached its highest point since the second quarter of 2014. Published by the Virginia REALTORS® Data recorded April 12, 2017
14
2017 First Quarter
The Virginia REALTORS® association is the largest professional trade association in Virginia, representing approximately 32,000 REALTORS® engaged in the residential and commercial real estate business. The Virginia REALTORS® association serves as the advocate for homeownership and private property rights and represents the interests of real estate professionals and property owners in the Commonwealth of Virginia. NOTE: The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict code of ethics. All inquiries regarding this report may be directed to: Jenny Wortham Virginia REALTORS® jwortham@virginiarealtors.org 804‐262‐3755 The numbers reported here are preliminary and based on current entries into multiple listing services. Over time, data may be adjusted slightly to reflect increased reporting. Information is sourced from multiple listing services across Virginia and is deemed reliable, but not guaranteed. Published by the Virginia REALTORS® Data recorded April 12, 2017
15