2016 - Second Quarter Virginia Home Sales Report

Published by the Virginia Association of REALTORS®, the advocate for real estate professionals and property owners in Virginia.

QUARTER

SECOND

2016

2016 Second Quarter

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 Association of REALTORS®. 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. 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®. Please take this into consideration when referencing regions.

Central

Southside

Eastern

Southwest

Hampton Roads

Valley

Northern

West Central

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 Association of REALTORS Data recorded July 12, 2016

1

2016 Second Quarter

Second Quarter Market Summary Second quarter metrics indicate that the Virginia residential real estate market has continued a trend of year‐over‐year and longer term improvement. Both the total number of sales and the value of transactions rose from the same period last year, to 34,688 units and $11.720 billion, respectively. June 2016 sales surpassed June 2015 by 1.2 percent, both exceeding pre‐ recession performance. The second quarter benefitted from especially strong April and May sales, with each month outperforming its prior year mark, by 10.5 percent and 12.6 percent, respectively.

Volume for the quarter ‐ the sum of all transactions for April, May, and June of 2016 ‐ was 8.6 percent higher than the same period last year, and nearly 20 percent higher than the second quarter of 2014. Median price increased less markedly year‐over‐year, rising only 0.9 percent from the second quarter of 2015 (from $274,900 to $277,500). The second quarter median price has risen each year since 2014.

Year‐over‐year, second quarter home sales increased in nearly all price bands, with the most significant increases in sales in the price ranges between $200K to $300K and $500 to $750K. Sales increased in every region of the state.

Mortgage interest rates continued to decline in the second quarter, with little indication of near term hikes as the Fed has reacted to sluggish national job growth and uncertainty in global markets. At historic lows, the 30‐year and 15‐year fixed mortgage interest rates (3.59 percent and 2.85 percent, respectively) continue to encourage buyers with relatively low‐ cost opportunity to enter the market.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

2

2016 Second Quarter

Month‐to‐Month Sales Trends Single Family Homes, Townhomes, Condos

Number of Single Family, Townhome, and Condo Sales

2013

2014

2015

2016

12,855 12,500

11,703 10,130

10,000 8,606 7,500

6,533 5,913

5,000

2,500 Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

2013 2014 2015 2016

Jan

Feb

Mar

Apr

May

June

July

Aug

Sep

Oct

Nov

Dec

5,613

6,022

7,555

8,739

10,582

10,873

10,457

10,234

8,243

7,996

6,990

7,606

5,427

5,706

7,150

8,507

9,702

10,632

10,177

9,487

8,360

8,447

6,660

8,304

5,807

6,085

8,521

9,169

10,370

12,704

11,823

10,207

9,576

8,883

7,027

8,763

5,913

6,533

8,606

10,130

11,703

12,855

There were 12,855 sales in June 2016, up 1.2 percent from June of last year. In keeping with industry seasonality, sales increased significantly from May to June (9.8 percent, from 11,703 to 12,855), though less sharply than between last May and June (22.5 percent, from 10,370 to 12,704).

Historically, Virginia records its highest sales in June and figures begin to taper as the summer months lead into the third quarter.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

3

2016 Second Quarter

Quarterly Residential Sales Single Family Homes, Townhomes, Condos

Number of Single Family, Townhome, and Condo Sales

40,000 34,688

35,000 30,194

30,000

32,243 31,606 28,934

25,000

28,841

28,024 24,673

23,411

22,592

21,052

20,413

20,000

18,283 7.6 %

15,000 10,000 5,000 0 2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

The second quarter of 2016 grew by 7.6 percent year‐over‐year, from a total of 32,243 in 2015 to 34,688. Each quarter of 2016 has outperformed its previous year benchmark, and each quarter of 2015 did the same relative to 2014. The year‐over‐year increases indicate that the market is sustaining a growth trend, as depicted also through annualized sales metrics (page 5).

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

4

2016 Second Quarter

Annualized Residential Sales Single Family Homes, Townhomes, Condos Number of Single Family, Townhome, nad Condo Sales

120,000 110,000 100,000 90,000 80,000

7.6 %

70,000 60,000 50,000 2013 Q1

2013 2013 2013 2014 2014 2014 2014 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2015 2015 2015 2016 2016 Q1 Q2 Q3 Q4 Q1 Q2

Each data point on the graph above represents twelve months of home sales data ending in the quarter shown. For example, the 2016 Q2 figure (112,019 sales) includes home sales from July 2015 through June 2016. This rolling sum of home sales reduces seasonal effect, providing a clearer indicator of long‐term trends in Virginia’s housing market.

There have been seven consecutive quarters of growth in annualized sales. Sustained growth in this measure is a positive indicator of improved long‐term performance and growth in the residential real estate market. Annualized sales ending in the second quarter of 2016 grew 2.2 percent from the previous quarter. Year‐over‐year, the measure grew 7.6 percent (from 104,091 to 112,019).

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

5

2016 Second Quarter

Regional Changes in Sales 2015 Q2 vs. 2016 Q2 Units +5.4 %

+8.6 %

+20.9 % +7.4 %

+6.0 % +18.1 %

+10 %

+5.4 %

Region Central

2015 Q2 6,911

2016 Q2 7,423

7.4%

Eastern

493

596

20.9%

Hampton Roads

6,824

7,505

10.0%

Northern

12,882

13,573

5.4%

Southside

594

626

5.4%

Southwest

425

502

18.1%

Valley

1,563

1,698

8.6%

West Central

2,514

2,666

6.0%

Other

37

99

167.6%

ALL of Virginia

32,243

34,688

7.6%

The chart above compares 2015 second quarter sales to 2016 second quarter sales, by region. The greatest year‐over‐year increases occurred in the Eastern 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. All eight regions experienced growth from the same period last year, for a statewide aggregate jump of 7.6 percent.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

6

2016 Second Quarter

Median Residential Sales Price Single Family Homes, Townhomes, Condos

$277,500

$249,000

$255,200

$265,000

$274,900

$247,550

$251,000

$260,000

$267,000

$249,000

$263,583

$235,000

$250,000

$232,500

Median Sales Price

$300,000

$268,242

$350,000

0.9 %

$200,000 3.9%

$150,000

2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Relative to the first quarter of 2016, median price rose by 11.4 percent, from $249,000 to $277,500.

Relatively steep increases in price suggest that inventory is becoming more limited. Summer months typically see higher demand, and with new listings not keeping pace with increased buyer activity, price increases reflect constrained supply.

Relative to last year’s second quarter, aggregate median price rose only slightly (0.9 percent), in part because the Northern Virginia market that accounts for a significant portion of sales experienced a marginal price decline. Second quarter 2016 median price was 3.9 percent higher than in the second quarter of 2014 ($267,000), indicating long term stability in residential market value.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

7

2016 Second Quarter

Regional Changes in Median Sales Price 2015 Q2 vs. 2016 Q2 ‐0.2 %

‐1.5 %

+7.6 % +3.5 %

+0.6 % 0.0 %

+5.3 %

+9.4 %

Region Central

2015 Q2 $226,900

2016 Q2 $234,900

3.5%

Eastern

$189,900

$204,250

7.6%

Hampton Roads

$223,000

$234,900

5.3%

Northern

$415,875

$415,000

‐0.2%

Southside

$90,062

$98,500

9.4%

Southwest

$125,000

$125,000

0.0%

Valley

$194,000

$191,000

‐1.5%

West Central

$168,925

$169,900

0.6%

Other

$189,900

$232,787

22.6%

ALL of Virginia

$274,900

$277,500

0.9%

Median sales price increased year‐over‐year in nearly every region, with marginal slides in the Northern and Valley Regions and no change in the Southwest region. Because Northern Virginia accounts for a substantial portion of overall sales, the slight regional decline in median price suppressed the overall state median price for an aggregate rise of just 0.9 percent.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

8

2016 Second Quarter

Quarterly Residential Sales Volume ($B) Single Family Homes, Townhomes, Condos $14

Billions of Dollars of Residential Sales

$12

$10

$8

$6

$4 8.6 %

$2

$0

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 second quarter of 2016 rose by 8.6 percent year‐0ver‐year, from $10.794 billion to $11.720 billion. Because the median price increase was relatively slight, the year‐over‐year increase in volume is primarily attributed to a similar growth in sales pace, or number of transactions.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

9

2016 Second Quarter

Annual Sales Volume by Quarter Single Family Homes, Townhomes, Condos $40

$35.103 $35

Billions

$30

$31.423 $6.959

11.7%

$7.403

$7.831

$25 $20

$9.335

$10.231 $9.056

$17.041

$15 $10

6.5%

$18.143

$10.794

$11.720

$9.964

$9.553

$5.573

$5.410

$6.247

$6.423

2013

2014

2015

2016

$5 $0

The 2016 outperformance of prior year quarterly comparisons suggests a year of continued growth.

Each quarter of 2015 outperformed 2014 benchmarks, and each of the first two quarters of 2016 has surpassed the volume of 2015 counterparts. Year‐to‐date volume exceeds $18.143 billion, a rise of 6.5 percent from the same point in 2015 ($17.041 billion) and 21.3 percent from the same point in 2014 ($14.963 billion).

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

10

2016 Second Quarter

Price Distribution of Residential Home Sales Single Family Homes, Townhomes, Condos 2015‐Q2 51 60

$2M +

8% 465 476

$1 M ‐ $1.5 M

2% 1,083 1,181

$750 K ‐ $1M Price Range

18%

101 109

$1.5 M ‐ $2 M

2016‐Q2

9% 3,719

$500K ‐ $750K

4,235 3,299 3,652

$400K ‐ $500K

14%

11% 5,261

$300K ‐ $400K

5,864

12% 7,584

$200K ‐ $300K

8,542 7,403

$100K ‐ $200K

7,921

0 ‐ $100K 0

1,000

2,000

2,703 2,648

‐2%

3,000

4,000

5,000

6,000

7,000

8,000

13%

7%

9,000

Number of Single Family, Townhome, and Condo Sales

Year‐0ver‐year home sales increased in every category except the lowest ($0‐$100K). Sales in ranges below $750,000 represent the vast majority of transactions in Virginia and are the clearest indicator of market performance. The slight decrease in the starter category likely reflects insufficient inventory. Growth was strongest in the ranges between $200K‐$300K and $500K‐$750K.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

11

2016 Second Quarter

Average Days on the Market Single Family Homes, Townhomes, Condos

Aaverage Days on the Market

120

90

85

89

83 73 66

81 68

67

77

73

68

83

68

63

60 7.4%

30

0 2013 Q1

2013 Q2

2013 Q3

2013 Q4

2014 Q1

2014 Q2

2014 Q3

2014 Q4

2015 Q1

2015 Q2

2015 Q3

2015 Q4

2016 Q1

2016 Q2

The average number of days on the market in second quarter 2016 decreased from the same quarter last year by 7.4 percent. Low days on the market reflect increased demand and limited inventory, as buyers move more quickly to secure purchases. The pronounced decrease from the first quarter to the second quarter is typical of industry seasonality. The decline in average number of days between first and second quarter 2016 was just as pronounced in the preceding year (24 percent, from 83 to 63 in 2016 and from 89 to 68 in 2015).

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

12

2016 Second Quarter

Monthly Residential Sales VIRGINIA (All MLS‐Reported Home Sales*) 16,000

UNITED STATES (Existing Home Sales*) 583,000

572,000

14,000 12,000

600,000 500,000

12,855

12,704

10,000

400,000 300,000

8,000 6,000

200,000

4,000 100,000

2,000 0

0 May‐15 Jun‐15

Jul‐15

Aug‐15 Sep‐15 Oct‐15 Nov‐15 Dec‐15 Jan‐16 Feb‐16 Mar‐16 Apr‐16 May‐16 Jun‐16

The changes in the pace of Virginia home sales through the second quarter tracked the changes in the pace of sales in the United States as a whole.

Monthly Residential Median Sales Price VIRGINIA (All MLS‐Reported Home Sales*) $320,000

UNITED STATES (Existing Home Sales*) $289,000

$282,000

$280,000 $240,000

$247,700

$236,300

$200,000 $160,000 $120,000 $80,000 May‐15

Jun‐15

Jul‐15

Aug‐15

Sep‐15

Oct‐15

Nov‐15

Dec‐15

Jan‐16

Feb‐16

Mar‐16

Apr‐16 May‐16

Jun‐16

Virginia median price changes were similar to the changes in the median of existing‐home sales prices nationally for the second quarter of 2016. Both Virginia and the United States as a whole showed a typical increase in median price, reflective of seasonal growth. *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 Association of REALTORS Data recorded July 12, 2016

13

2016 Second Quarter

Virginia Unemployment Rate Source: Bureau of Labor Statistics 6.0% 5.5%

5.8% 5.4%

5.0%

5.3%

5.2%

5.0%

4.8%

4.5%

4.7%

4.9% 4.5% 4.1%

4.0%

4.1% 3.8%

3.5% 3.0% 2013‐Q3 2013‐Q4 2014‐Q1 2014‐Q2 2014‐Q3 2014‐Q4 2015‐Q1 2015‐Q2 2015‐Q3 2015‐Q4 2016‐Q1 2016‐Q2

The Virginia unemployment rate dropped in the second quarter of 2016 to a historic low, continuing to outperform the average national rate. Along with a declining unemployment rate, the perception of employment stability correlates with increased consumer confidence that may encourage potential home buyers to enter the market.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

14

2016 Second Quarter

Average 30‐Year Mortgage Interest Rates Source: FreddieMac 4.60% 4.44% 4.30%

4.20%

4.36% 4.23%

4.14% 3.97%

3.95% 3.83%

3.80%

3.90% 3.74%

3.72%

3.69%

3.59%

3.40% 3.00% 2013‐Q2 2013‐Q3 2013‐Q4 2014‐Q1 2014‐Q2 2014‐Q3 2014‐Q4 2015‐Q1 2015‐Q2 2015‐Q3 2015‐Q4 2016‐Q1 2016 Q2

Average 15‐Year Mortgage Interest Rates Source: FreddieMac 3.60% 3.48%

3.40%

3.35%

3.40%

3.32%

3.20%

3.27%

3.18%

3.00% 2.80%

3.01% 2.85%

3.06%

3.15%

3.13% 3.03% 2.85%

2.60% 2.40% 2.20% 2013‐Q2 2013‐Q3 2013‐Q4 2014‐Q1 2014‐Q2 2014‐Q3 2014‐Q4 2015‐Q1 2015‐Q2 2015‐Q3 2015‐Q4 2016‐Q1 2016 Q2

Average 30‐year and 15‐year fixed mortgage interest rates decreased in the second quarter for the fourth consecutive period. Despite earlier suggestions by the Federal Reserve Bank that key rates would be raised this year, slower than anticipated national job growth and global economic considerations including the ‘Brexit’ vote have stalled strategic rate hikes. Continued low financing rates enable more buyers to enter the market.

Published by the Virginia Association of REALTORS Data recorded July 12, 2016

15

2016 Second Quarter

The Virginia Association of REALTORS® (VAR) is the largest professional trade association in Virginia, representing approximately 32,000 REALTORS® engaged in the residential and commercial real estate business. VAR 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: Martin Johnson Virginia Association of REALTORS® Martin@VARealtor.com 804‐249‐5708

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 Association of REALTORS Data recorded July 12, 2016

16