Headwinds continue to roil Virginia’s housing market, but buyers remain willing to shell out more even in a high-interest-rate environment.
September’s median sales price of $380,000 across the Old Dominion in September represented a 4.1-percent increase from the $365,000 a year ago, according to figures reported Oct. 19 by the Virginia Realtors trade group.
And for the first nine months of the year, things were similar – the January-through-September median sales price of $390,000 in 2023 was up from $376,000 in 2022.
That’s good news for sellers, of course, but not music to the ears of prospective purchasers, particularly given the higher costs involved in borrowing money.
“There have certainly been setbacks that are impacting the already mounting affordability challenges,” said Ryan Price, chief economist for Virginia Realtors. “Many potential buyers are currently in ‘wait it out mode,’ while others are being priced out of the market altogether.”
“One positive piece of news for those buyers is that while, on average, prices are still climbing, the rate of growth is slowing. This trend is likely to continue as buyers grapple with higher mortgage rates,” Price said.
September’s median sales prices were up from a year before in all eight geographic areas of the commonwealth, with three of the eight recording double-digit growth. Median sales prices ranged from $178,100 in Southside Virginia to $587,000 in Northern Virginia.
Limited inventory may be propping prices up, but also is keeping sales down. The 8,023 transactions in September statewide represented a decline of 21 percent from a year before, not much improvement from the 23-percent drop-off seen year-to-date.
And that’s impacted the bottom line of the real-estate industry. Total sales volume for September was down 17 percent to $3.7 billion, while for the first nine months of the year it was down just under 20 percent to $37.1 billion.
That’s a drop of $9.1 billion in sales volume year-to-date compared to 2022, which at a typical commission rate of 5 percent equates to $455 million that didn’t go into the coffers of real-estate firms and agents – not to mention the impact on those providing services that are ancillary to property transactions, from home inspectors to closing agents to home-improvement emporiums.
There were 18,188 active listings throughout Virginia at the end of September, about 1,600 fewer than a year ago (down 8%).
“The sharpest reductions in listings continue to be in Northern Virginia, as well as some segments of the Richmond metro region,” says Virginia Realtors president Katrina Smith. “However, we are seeing growth in some places. Parts of western Virginia, including the Shenandoah Valley and New River Valley, have more listings on the market than a year ago.”
“Because these are smaller markets, these increases don’t move the needle on the overall state number,” Smith said.
Figures represent most, but not all, homes on the market. All September 2023 figures are preliminary and are subject to revision.
