Trends in Virginia's Housing Markets - 1st Quarter 2010
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Trends in Virginia's Housing Markets - 1st Quarter 2010

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First Quarter 2010 Report from the Virginia Association of REALTORS on Trends in Virginia's Housing Markets

First Quarter 2010 Report from the Virginia Association of REALTORS on Trends in Virginia's Housing Markets

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Trends in Virginia's Housing Markets - 1st Quarter 2010 Trends in Virginia's Housing Markets - 1st Quarter 2010 Document Transcript

  • Trends in Virginia’s First Quarter 2010 Housing Markets For Immediate Release: April 30, 2010 Contact: Lisa Noon, (804) 249-5716 or lisa@varealtor.com Led by low interest rate and first-time buyers, Virginia’s housing markets continue to show steady growth, according to the first quarter 2010 home sales report released today by the Virginia Association of Realtors. “It’s evident that the tax credit did its job in encouraging on-the-fence buyers to get into the market before the cutoff,” com- mented VAR President Cindy Stackhouse of Woodbridge, VA. Today, April 30, marks the last day to enter into a contract for the tax credit. "This is a buyers’ market, and there couldn’t be better incentives for prospective home buyers to make the move,” she added. “With the low rates we’re experiencing, plus a great selection at excellent prices, buying a home now offers huge advantages.” “Sellers need to be patient, price their homes correctly, work with a professional who can market and showcase your home at its best, and be flexible,” Stackhouse added. Most areas of the Commonwealth showed increases in sales in the first quarter over last year. The areas that led the state in closed sales include the Northern Virginia and Tidewater regions. The highest percentage increase was seen in the Upper Shenandoah Val- ley region with a 14.8 percent increase over the last year. Also for the first quarter, median sales prices advanced 8.9 percent statewide compared to the same period last year. The North- ern Virginia region showed the greatest increase (19.2 percent) in median sales price for the quarter compared to the same time last year. # # # Highlights  Compared to this time last year, six of Virginia’s seven regions posted sales increases. The highest annual percentage increase in sales occurred in the Upper Shenandoah Valley region which had a 14.8 percent increase in sales compared to 1Q 09. Overall though, the first quarter’s total existing home sales in Virginia declined by 33.8 percent vs. 4Q 09 but by only 1.1 percent compared to 1Q 09.  The statewide median sales price advanced $19,558 from the median in the first quarter of 2009 (+8.9 percent) to $240,470. Compared to 1Q 09, the Northern Virginia region had the highest percentage increase in its median sales price, it was up 19.2 percent to $305,174.  Following three consecutive quarterly increases, the statewide median sales price decreased slightly (-1.5 percent) com- pared to the fourth quarter of 2009. However, median sales prices increased in two of the seven regions since last quar- ter. Increases amounted to 6.8 percent compared to the fourth quarter of 2009 in the Central region and 4.7 percent in the Southwest region.  The number of foreclosures in Virginia decreased 2.4 percent from the first quarter of 2009 to the first quarter of 2010. An especially good sign was the number of foreclosures in the Northern Virginia region. They declined for the second con- secutive quarter (-4.6 percent) and were down 21.5 percent vs. 1Q 09. Foreclosures did spike in the South Central region compared to last quarter (+43.3 percent).  While the quarter ended with a net loss of 42,200 jobs so far this year, jobs were actually added to Virginia’s payrolls in March. The largest percentage increase in new jobs was in the Federal Government sector (+4.5 percent) and the largest percentage loss was in the Construction sector (-8.6 percent). Unemployment, at 7.4 percent, was the lowest among Vir- ginia’s neighbors in March and compares favorably to the national rate of 9.7 percent.  In national news, the $8,000 First Time Buyer’s Credit program contributed to March’s 7 percent surge in existing home sales and the general trend is a stabilization of median sales prices. Inventory has trended down for 20 consecutive months. Monthly mortgage rates started the quarter at 5.03 percent and declined to 4.97 percent by the end of March.
  • Page 2 Trends in Virginia’s Housing Markets Virginia Annual Job Change  The quarter began with job losses in January and to a lesser extent in February but by March, the Commonwealth was adding jobs. At the end of the first quarter, job losses so far this year totaled –42,200.  The largest gain (as of March 2010 compared to March 2009) was in the Education and Health Service sector (+15,200 jobs) while the largest declines were in the Manufacturing and Mining/Logging sectors(-15,800 jobs each). The highest percentage increase compared to last March was in the Federal Government sector (+4.5 percent). The largest percentage decline was in the Construction sector (-8.6 percent) 60.0  Virginia’s percentage decline in 48.0 jobs since March 2009 was 1.4 percent. 40.0 Month-over-the-Month (000s)  This decline compares to 20.0  +1.6 percent in DC;  -.9 percent in Maryland; 0.0  -1.5 percent in North Jan Feb Mar Carolina -20.0  -1.9 percent in Tennes- -29.8 see; and -40.0  –1.9 percent in West Vir- ginia. -60.0 -60.4 Source; BLS, NSA -80.0 Unemployment Rate (VA and USA)  The unemployment rate in the Commonwealth was 1.0 percentage point higher in March 2010 compared to March 2009; essen- tially the same as the increase across the nation over the same time period (1.1 percent). Virginia’s March 2010 unemploy- ment rate was tied for the fourteenth lowest in the country with Minnesota.  The highest statewide unemployment rate was again in Michigan (14.1 percent). The lowest was in North Dakota (4.0 per- cent), a typical result.  Virginia continues to have 12.0 Unemployment Rate (March of Each Year) Source: BLS, SA the lowest unemployment VA rate among its neighbors— 11.0 USA 9.7 10.0  MD = 7.7 percent; 9.0 8.6  WV = 7.4 percent;  TN = 10.6 percent; 8.0 7.4  NC = 11.1 percent; and 7.0 6.4  DC = 11.6 percent. 5.7 5.9  As of February 2010, the 6.0 5.6 5.2 5.1 Danville MSA again had the 5.0 4.7 4.3 4.2 4.2 4.4 highest unemployment rate 3.8 3.6 in the state (12.9 percent) 4.0 3.4 2.9 and Northern Virginia had the 2.6 2.8 3.0 lowest (5.8 percent). 2.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
  • Page 3 Trends in Virginia’s Housing Markets Virginia Quarterly Sales and Median Sales Prices: 2Q 2008—1Q 2010 27,500 $280,000 Sales $268,303 MSP $270,000 25,000 $254,177 $260,000 22,500 $250,000 Median Sales Price $244,108 20,000 Total Sales $240,470 $233,491 $240,000 $232,335 17,500 $224,500 $230,000 $220,912 15,000 $220,000 12,500 $210,000 24,779 25,281 18,577 15,996 18,884 22,246 23,904 15,813 10,000 $200,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Region Definitions Central Region South Central Region Chesterfield, Hanover, Henrico, and the city of Richmond (Richmond Association ) Amherst, Appomatox, Bedford and Campbell counties, cities of Bedford and Lynchburg Caroline, Charles City, Dinwiddie, Goochland, King William, Louisa, New Kent, (Lynchburg Association of REALTORS) Powhatan, Prince George, and cities of Colonial Heights, Hopewell and Petersburg Danville and Pittsylvania counties (Dan River Region Association of REALTORS) (Southside Virginia Association of REALTORS) Halifax and Mecklenburg counties (Southern Piedmont Land and Lake Board) Lancaster, Northumberland, Richmond and Westmoreland counties (Northern Neck Amelia, Appomatox, Buckingham, Brunswick, Charlotte, Cumberland, Fluvanna, Halifax, Association of REALTORS) Lunenberg, Mecklenburg, Prince Edward, Nelson, Nottoway, and Powhatan counties (South Central Association of REALTORS) Essex, Gloucester, King & Queen, King William, Lancaster, M athews, M iddlesex, and Henry and Patrick counties and city of Martinsville (Martinsville, Henry & Patrick Counties Northumberland counties (Chesapeake Bay & Rivers Association of REALTORS) Association of REALTORS ) North Central Region Southwest Region City of Charlottesville and counties of Albemarle, Greene, Louisa, Nelson and Fluvanna Dickenson, Grayson, Lee, Russell, Smyth, Washington and Wise counties (Southwest (Charlottesville Area Association of REALTORS ) Virginia Association of REALTORS) Augusta County and cities of Highland, Waynesboro and Staunton (Greater Augusta Lee, Scott, Washington and Wise counties (Bristol TN-VA Association of REALTORS) Association of REALTORS) Allegheny, Bedford, Botetourt, Craig, Franklin, Roanoke, Southampton counties and cities Bath, Buchanan and Rockbridge counties and cities of Buena Vista, Clifton Forge, of Franklin, Salem and Roanoke (Roanoke Valley Association of REALTORS) Covington and Lexington (Lexington/Buena Vista/Rockbridge Association of REALTORS) Bland, Carroll, Floyd, Giles, Grayson, Montgomery, Pulaski, Tazewell and Wythe counties and cities of Galax and Radford (New River Valley Association) Northern Virginia Region Tidewater Region Fairfax, Arlington counties and cities of Alexandria, Fairfax and Falls Church (Northern Isle of Wight, Suffolk, York counties and cities of Chesapeake, Hampton, Newport News, Virginia Association of REALTORS) Norfolk, Poquoson, and Virginia Beach (Hampton Roads REALTORS Association) Loudoun County (Dulles Area Association of REALTORS) James City and New Kent counties and cities of Williamsburg and Charles City Prince William County and cities of M anassas and M anassas Park (Prince William (Williamsburg Area Association of REALTORS) Association of REALTORS ) Accomack and Northampton counties (Eastern Shore Association of REALTORS) Stafford, Spotsylvania, King George and Caroline counties and city of Fredericksburg Upper Shenandoah Valley Region (Fredericksburg Area Association of REALTORS) Clarke, Frederick, Warren counties and city of Winchester (Blue Ridge Association) Fauquier, Culpeper, Orange, M adison, Scott and Rappahannock counties (Greater Page and Shenandoah counties (Massanutten Association of REALTORS) Piedmont Association of REALTORS) Rockingham County and city of Harrisonburg (Harrisonburg/Rockingham Association)
  • Fourth Quarter 2009 Page 4 Foreclosures in Virginia and by Region  The total number of foreclosures increased in Virginia from 14,668 last quarter to 15,563 in the first quarter of 2010 (+6.1 per- cent). That followed a 19.1 percent decrease from the third to the fourth quarter.  An interesting phenomenon surfaced in the fourth quarter of 2009. Northern Virginia has historically preceded other regions in the Commonwealth with regard to foreclosure activity. Again in the first quarter of 2010, Northern Virginia’s foreclosures declined compared to the previous quarter (-4.5 percent). While it still led the state with the highest number of foreclosures by a large margin, it actually posted the only percentage decrease this quarter. Quarter Totals  The North Central region posted the lowest per- Region 1Q10 2Q10 3Q10 4Q10 centage quarterly increase in foreclosures last quarter (+.8 percent) compared to 4Q 09. Central 2,699 0 0 0  For the second consecutive quarter, the number North Central 267 0 0 0 of total foreclosures increased in the South Cen- Northern Virginia 7,220 0 0 0 tral region, posting the highest percentage in- crease in the state (+43.3 percent). South Central 397 0 0 0 Southwest 562 0 0 0  Foreclosures in the Southwest region had the Tidewater 3,618 0 0 0 second highest percentage increase during the first quarter, +20.9 percent. Upper Shenandoah Valley 781 0 0 0 Total 15,544 0 0 0 Note: “Others” denotes counties outside the VAR reporting area. Overall, the number of foreclosures Others 19 0 0 0 in these areas dropped from 21 to 19 in the first Virginia Total 15,563 0 0 0 quarter of 2010 for a 9.5 percent decline. Source: RealtyTrac 1Q 10 Sales by Region Region 1Q 10 vs. 4Q 09 vs. 1Q 09 Central 2,067 -30.4% 7.0% North Central 656 -34.5% 12.9% Northern Virginia 7,064 -22.4% -10.7% South Central 656 -23.5% 5.3% Southwest Virginia 1,132 -29.3% 5.5% Tidewater 3,610 -36.1% 8.4% Upper Shenandoah Valley 628 -28.6% 14.8% 1Q 10 Median Sales Prices by Region Region 1Q 10 vs. 4Q 09 vs. 1Q 09 Central $209,016 6.8% 6.5% North Central $210,526 -8.1% -16.3% Northern Virginia $305,174 -0.8% 19.2% South Central $118,706 -0.5% -3.6% Southwest Virginia $141,524 4.7% 6.4% Tidewater $206,957 -2.8% -3.9% Upper Shenandoah Valley $158,516 -5.9% -6.6%
  • Page 5 Trends in Virginia’s Housing Markets Central Region  During the first quarter of 2010, total sales in the Central region declined 30.4 percent compared to the fourth quarter of 2009 but improved 7.0 percent compared to the first quarter of 2009.  Following two consecutive quarters of declines, the median sales price in the Central region increased 6.8 percent in the first quarter of 2010 compared to last quarter. The percentage gain was 6.5 percent compared to 1Q 09. 4,000 $245,000 Sales $233,816 MSP $235,000 3,500 $225,832 $225,000 Median Sales Price 3,000 $212,198 $215,000 Total Sales $209,016 $204,257 $205,000 2,500 $196,279 $199,075 $195,704 $195,000 2,000 $185,000 3,546 3,341 2,157 1,931 3,106 3,400 2,968 2,067 1,500 $175,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 North Central Region  Perhaps due to the bad weather during the first quarter, sales in the North Central region declined by 34.5 percent compared to the fourth quarter of 2009 but showed a 12.9 percent improvement over the first quarter of 2009.  The median sales price declined for the third consecutive month to the lowest point in at least two years (-8.1 percent). There was also a steep decline compared to the same time last year (-16.3 percent). 1,300 $257,002 $260,000 $253,512 Sales $252,874 $251,524 1,200 $250,477 MSP $246,912 $250,000 1,100 $229,105 Note: MSP excludes Greater Augusta Area 3Q 08-4Q 09 1,000 $240,000 Median Sales Price Total Sales 900 $230,000 800 700 $220,000 600 $210,526 $210,000 500 1,012 1,231 797 581 911 1,176 1,001 656 400 $200,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
  • Fourth Quarter 2009 Page 6 Northern Virginia Region  In the Northern Virginia region, total sales declined 22.4 percent from the fourth quarter of 2009 to 7,064 units and declined 10.7 percent from the first quarter of 2009. Sales rose dramatically in the second quarter of 2009 (up 39.6 percent from the first quarter) but declined in every quarter since then.  Median sales prices declined slightly in the first quarter compared to the fourth quarter of 2009 (-.8 percent) but had a 19.2 percent increase compared to the same quarter last year. 12,000 $400,000 Sales MSP 11,000 $350,000 $307,812 $301,182 $305,174 10,000 $342,636 $321,833 $300,000 $307,680 Median Sales Price 9,000 Total Sales $270,301 $250,000 $255,965 8,000 $200,000 7,000 $150,000 6,000 10,518 11,457 9,281 7,912 11,045 10,768 9,103 7,064 5,000 $100,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 South Central Region  The South Central region saw sales decline in the first quarter by 23.5 percent from fourth quarter 2009 totals. However, to- tal sales improved over the first quarter of 2009 total by 5.3 percent.  After a sharp decline in the fourth quarter, median sales prices fell .5 percent in the first quarter of 2009. The decline com- pared to the first quarter of 2009 was 3.6 percent. 1,200 $140,000 Sales $134,995 1,100 $132,994 MSP $135,000 $130,664 $130,000 1,000 $125,317 $123,164 $125,000 Median Sales Price 900 $119,248 Total Sales $115,348 $118,706 $120,000 800 $115,000 700 $110,000 600 $105,000 1,155 1,068 749 623 909 1,014 857 656 500 $100,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
  • Page 7 Trends in Virginia’s Housing Markets Southwest Virginia Region  Total sales declined in the Southwest region during the first quarter of 2010 by a steep 29.3 percent from the last quarter of 2009 but posted a higher total compared to the first quarter of 2009 (+5.5 percent).  Median sales prices increased following two quarterly declines. The increases amounted to 4.7 percent vs. 4Q 09 and 6.4 per- cent vs. 1Q 09. 2,100 $170,000 Sales $163,519 $162,116 MSP $165,000 1,900 $160,000 $157,313 1,700 Median Sales Price $155,000 Total Sales 1,500 $150,000 $145,361 $145,199 $145,000 1,300 $141,524 $140,000 $133,062 $135,225 1,100 $135,000 1,945 1,717 953 1,073 1,793 1,983 1,600 1,132 900 $130,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Tidewater Region  Sales declined sharply in the Tidewater region during the first quarter of 2010. Compared to the last quarter, the decline measured 36.1 percent but the region posted an 8.4 percent gain compared to the first quarter of 2009.  Median sales prices declined for the second consecutive month, -2.8 percent vs. 4Q 09 and –3.9 percent vs. 1Q 09. 6,500 $245,000 $240,669 Sales 6,000 MSP $240,000 $235,617 $235,000 5,500 $230,000 $225,102 Median Sales Price 5,000 $225,542 Total Sales $225,000 4,500 $221,059 $216,804 $220,000 4,000 $213,025 $215,000 3,500 $210,000 $206,957 3,000 $205,000 5,787 5,596 3,961 3,327 5,342 5,941 5,653 3,610 2,500 $200,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10
  • Fourth Quarter 2009 Page 8 Upper Shenandoah Valley Region  Total sales declined sharply in the Upper Shenandoah Valley region during the first quarter (-28.6 percent) following two rela- tively stable quarters. However, total sales increased 14.8 percent since the first quarter of 2009.  The median sales price declined for the third consecutive quarter (-5.9 percent vs. 4Q 09 and –6.5 percent vs. 1Q 09 to its low- est point in at least two years. 1,000 $220,000 $211,322 Sales MSP $210,000 900 $199,088 $200,000 800 Median Sales Price $190,000 Total Sales 700 $182,275 $180,000 $174,489 $170,600 600 $169,785 $168,405 $170,000 500 $158,516 $160,000 816 871 679 547 798 886 880 628 400 $150,000 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 Statewide Economic Backdrop  Virginia’s construction starts are included in the Census Bureau’s “South Region” and the annualized total advanced 9.1 per- cent compared to last quarter and was an impressive 23 percent ahead of first quarter figures in 2009—even with an espe- cially harsh winter in the Commonwealth.  The total number of building permits issued in Virginia from January and February 2010 was 2,521 permits, 11.3 percent fewer than at the same time in 2009 and 12.9 percent below the total in the first two months of 2009. Virginia Economic Indicators 1Q10 vs. 4Q09 vs. 1Q09  Foreclosures increased 6.1 percent in the first quarter compared to the fourth quarter 1 Starts (South Region) 337 9.1% 23.0% of 2010. However, the 15,563 foreclosures 2 total for the quarter was 2.4 percent less YTD Building Permits 2,521 -12.9% -11.3% than the total this time last year. Foreclosures 15,563 6.1% -2.4% 3 -42.2 -1.2% -1.4%  Over 42,000 jobs were lost from Virginia’s Non-Farm Employment 2009 payrolls in the first quarter, down 1.2 4 Unemployment Rate 7.4 8.8% 15.6% percent from the last quarter and also down 1 Seasonally Adjusted Annual Rate (000s); 3rd Month of Quarter 1.4 percent from the first quarter of 2009. 2 As of 2nd Month of Quarter  Unemployment in the state rose in March 3 Not Seasonally Adjusted (000s); 3rd Month of Quarter resulting in an 8.8 percent increase quarter- 4 3rd Month of Quarter over-quarter. Compared to the rate at this time last year of 6.4 percent, the increase was 15.6 percent quarter-over-year.
  • Page 9 Trends in Virginia’s Housing Markets National Economic Backdrop  While existing home sales increased almost 7 percent in March, existing home sales decreased 16.9 percent for the entire first quarter of 2010 compared to the fourth quarter of 2009. This is typical of the cyclical nature of the existing home market. Compared to the same time last year though, sales increased 17.6 percent. The median sales price increased slightly com- pared to last quarter (+.1 percent) and compared to the first quarter of 2009 (+.5 percent). The 8.0 months of supply in March was 11.1 percent higher than the fourth quarter of 2009 but a noteworthy 67 percent below the inventory level last year. National Economic Indicators 1Q10 vs. 4Q09 vs. 1Q09  New home sales totals increased 16.4 percent from the fourth quarter of 2009 1 and almost 23 percent compared to the Starts 626 9.2% 20.2% first quarter of 2009. Median sales prices 1 685 5.0% 34.0% Building Permits declined from the last quarter of 2009 Existing Home Sales 1 but rose about 6 percent over the this time last year. Reaching the lowest level Sales 5,350 -16.9% 17.6% in over two years, the new homes inven- Median Sales Price $170,700 0.1% 0.5% tory fell to only 6.7 months in March. Month's Supply 8.0 11.1% -67.0% 1  Following the highest three-month pe- New Home Sales riod in history for foreclosures, the total Sales 411 16.4% 22.7% number of foreclosures declined 6.0 per- Median Sales Price $214,000 -3.3% 5.9% cent across the country in the first quar- ter of 2010. However, the 932,234 fore- Month's Supply 6.7 -15.2% -40.2% closures recorded in the first quarter were 16.0 percent higher than the total Foreclosures 932,234 -6.0% 16.0% in the first quarter of 2009. A partial 2 162 0.1% -1.8% explanation may be that banks were Non-Farm Employment 3 starting to work through the shadow in- Unemployment Rate 9.7% -3.0% 38.9% ventory of pending foreclosures. 3 Consumer Confidence Overall Index 52.5 -2.1% 101.9% Present Situation Index 26.0 28.7% 20.9% Expectations Index 70.2 -7.5% 142.9% 3 4.97% 0.8% -0.6% Monthly Mortgage Rates 4Q09 3Q09 1Q09 4 5.6% 2.2% -6.4% Gross Domestic Product (GDP) 1 Seasonally Adjusted Annual Rate (000s); 3rd Month of Quarter 2 Seasonally Adjusted (000s); 3rd Month of Quarter 3 3rd Month of Quarter 4 Measures percentage change from previous quarter; 3rd Estimate Virginia Association of REALTORS® • Lisa@VARealtor.com Prepared by Rosemary deButts, Housing Analyst 10231 Telegraph Road • Glen Allen, VA 23059 540.338.2212 • www.housinganalyst.net Tel: (804) 264-5033 • Fax: (804) 262-0497 • www.VARealtor.com rosemarydebutts@verizon.net