2011-Q3 Virginia Home Sales Report

VIRGINIA Home SAleS RepoRt se

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


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THIRD

2011-Q3Virginia Quarterly Home Sales Report

Published by the Virginia Association of REALTORS® Page 2

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January February March April May June July August September October November December

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Virginia Month-to-Month Sales TrendsSingle Family Homes, Townhomes, Condos

2008 2009 2010 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

2011 4,699 5,105 7,081 6,649 8,081 9,120 7,867 7,998 6,640

Residential home sales in Virginia increased significantly during the third quarter of 2011 as compared to 2010. Sales increased 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.

It is important to realize, however, that home sales during the third quarter of last year were in some ways artifically deflated by the federal home buyer tax credits that were available to home buyers during the first six months of 2010. When these tax credits expired, the real estate market slowed considerably -- and that slowing took place in the third and fourth quarters of 2010.

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2008 2009 2010 2011

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2008 2009 2010 2011

▲10% ▲11%

▲3%



26,440

19,641

16,889

25,15726,156

22,849

16,541

27,733

20,774

18,513

16,885

23,850

22,505

0

5,000

10,000

15,000

20,000

25,000

30,000

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

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Virginia Quarterly Residential SalesSingle Family Homes, Townhomes, Condos

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.



90,894 90,67589,640

88,127 87,843

91,051 90,703

93,279

87,897

83,561 83,905

80,02281,753

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

90,000

95,000

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

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Virginia Annualized Residential SalesSingle Family Homes, Townhomes, Condos

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.



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%

Central Valley+10.3%

Northern Virginia-2.1%

Roanoke / Lynchburg / Blacksburg+25.5%

Southwest Virginia+44.6% Southside Virginia

+29.3%

Hampton Roads /Chesapeake Bay

+18.9%

Greater Richmond+16.5%

Regional Changes in Sales2010-Q3 vs. 2011-Q3 Units

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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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

Med

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Virginia Median Residential Sales PriceSingle Family Homes, Townhomes, Condos

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.




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%

Roanoke / Lynchburg / Blacksburg-6.1%

Central Valley-7.2%

Northern Virginia+1.1%

Southwest Virginia-5.2% Southside Virginia

+15.9%


-9.8%

Greater Richmond-6.0%

Regional Changes in Median Sales Prices2010-Q3 vs. 2011-Q3

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.



8,005

5,585

4,416

7,182

7,625

6,411

4,553

8,198

6,402

5,433

4,479

7,033

6,621

0

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3,000

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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

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Virginia Quarterly Residential Sales VolumeSingle Family Homes, Townhomes, Condos

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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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

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Virginia Average Days On MarketSingle Family Homes, Townhomes, Condos

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.



2,914

6,420

5,165

3,137

1,847

2,075

628

232

62

25

2,230

5,612

4,901

3,213

1,764

2,124

561

258

54

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0 1,000 2,000 3,000 4,000 5,000 6,000 7,000

0 - $100K

$100K - $200K

$200K - $300K

$300K - $400K

$400K - $500K

$500K - $750K

$750K - $1M

$1M - $1.5M

$1.5M - $2M

$2M +

Number of Single Family, Townhome and Condo Sales

Pri

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Virginia Price Distribution Of Residential Home SalesSingle Family Homes, Townhomes, Condos

2010-Q3 2011-Q3

-26%

+15%

-10%

+12%

-2%

+5%

-2%

+5%

+14%

+31%

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%.




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%

Central Valley+28.6%

Northern Virginia+1.8%

Roanoke / Lynchburg / Blacksburg+19.4%

Southwest Virginia-43% Southside Virginia

+21.7%


-4.3%

Greater Richmond+13.9%

Regional Changes in Foreclosures2011-Q2 vs. 2011-Q3

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.



7,2107,998

414,000

502,000

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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

Monthly Residential SalesVIRGINIA (All MLS-Reported Home Sales) UNITED STATES (Existing Home Sales)

$250,000 $239,000

$177,300$168,300

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

$220,000

$240,000

$50,000

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$150,000

$200,000

$250,000

$300,000

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

Monthly Residential Median Sales PriceVIRGINIA (All MLS-Reported Home Sales) UNITED STATES (Existing Home Sales)

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%.

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.



Unemployment Rates By Stateseasonally 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% t 7 9%

SOURCE: Bureau of Labor Statistics Local Area Unemployment Statistics

6.0% to 7.9%

4.0% to 5.9%

3.9% or below

4.0% 4.0%

5.1%

6.7%7.2% 6.9% 7.0%

7.4%7.0%

6.5% 6.4% 6.3% 6.0%

2%

3%

4%

5%

6%

7%

8%

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

Virginia Unemployment RateSource: Bureau of Labor & Statistics

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.



6.0%

5.3%5.0%

5.4%

5.1%4.9% 5.0%

4.7%

4.4%

4.7%4.9%

4.5%

4.0%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

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 30-Year Mortgage Interest RatesSource: FreddieMac

5.6%

5.0%

4.6%4.9%

4.5% 4.4% 4.3%4.2%

3.8%4.1% 4.1%

3.7%

3.3%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

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 RatesSource: FreddieMac

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.



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 RelationsVirginia Association of REALTORS®10231 Telegraph Road, Glen Allen, VA 23059(804) 249-5716 [email protected]/HomeSales

Economic Regions

Central Valley:

Greater Richmond:

Hampton Roads / Chesapeake Bay:

Northern Virginia:

Roanoke / Lynchburg / Blacksburg:

Southside Virginia:

Southwest Virginia:

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, Chester�eld, 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

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

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.

Documents

2011-Q3 Virginia Home Sales Report