Virginia Experiences Languishing Sales, Rising Inventory
They are — literally — signs of the times.
Red placards standing in front of two homes on one block in the Coleman Place neighborhood. For Sale. Price Reduced.
From Virginia Beach to Suffolk, much of the momentum in the Virginia real estate market has shifted over to buyers after years of rapid price increases and speedy sales brought hefty gains to sellers.
According to the Virginian-Pilot, prices generally continued to grow in September, but sellers watched their properties linger on the market for longer stretches and the volume of sales drop steeply.
South Hampton Roads posted a 20.2 percent drop in sales from the same month last year and hit its lowest mark in at least five months.
The data includes land, condominium units, single-family homes and commercial real estate, with the large majority of sales coming on the residential side.
The average property sold locally in September had stayed on the market for 52 days, up from 28 days in September 2005.
“It’s a more difficult market. In the market that we were in, where people could essentially just put out a sign and sell their house, people were lining up to buy,” said Dave Macklin, an associate broker with The Butler Team in Virginia Beach.
The mania is long gone, but there are still signs of life for real estate. Median home prices rose in Virginia Beach, accounting for 39 percent of the region’s sales in September. The median price ticked $10,000 higher, to $259,900, a bump of 4 percent from September 2005.
But as fewer people can afford mortgage loan financing, the average sale price in Virginia Beach fell by $12,600, or 3.9 percent. The disparity between the median and the average price suggests that the biggest, most expensive homes are not selling.
“People saw friends and neighbors make huge amounts of money two years ago, and they want that sort of money,” said Andi Helfant-Frye, a broker with Advance Realty in Virginia Beach. “They don’t have a sense of urgency, so they’re going to sit with it.”
The number of units sold in Virginia Beach shrank by 23.7 percent in September and the days on the market more than doubled to 47 days.
In Norfolk, the average time on the market extended to 58 days, up from 35 days a year ago, but sellers willing to wait it out earned a median sale price of $195,000 — a jump of more than $19,000 in one year.
Chesapeake experienced the lowest median price appreciation, at less than 1 percent, while Suffolk had the highest, jumping $33,200, or 12.8 percent. Portsmouth was close behind as prices rose 12.5 percent to $168,750.
Many sellers are reluctant to lower their asking prices. But in what is quickly turning into a buyer’s market, some are offering enticements such as picking up closing costs to attract buyers.
A glimpse at the housing market nationwide shows that the number of homes for sale hit 3.92 million in August, up sharply from 2.85 million a year earlier. Some worry that too many sellers still expect unrealistic prices.
“In some areas home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to a build up in inventory,” Thomas M. Stevens, president of the National Association of Realtors (NAR) said.