The regional median home price was up again in October, despite shrinking demand heading into the winter season. The median sold price settled at $440,000 this month compared to $425,000 in October of 2022, representing a nearly 4% year-over-year increase. Units sold were down nearly 20%, coming in at 410 this October compared to 506 units sold last year. Total sold dollar volume was down nearly 19%, posting approximately $195.5 million in sales for October of 2023 compared to $240 million in sales last year.
Spotsylvania County was especially notable in October posting its second highest median sold price on record. The month saw prices soar to $470,000 compared to $400,000 in October of last year. This price was eclipsed only by August of this year when median price rose to $472,500.
Days on market, the time it takes from when a listing enters the market until it receives a ratified contract and is removed from active status on the multiple listing service, was static compared to last October, coming in at 26 days. Continued constrained supply is keeping days on market down since there isn’t much out there for active buyers to choose from.
Inventory was also down again in October, finishing out the month with 900 active listings compared to 1,012 last year, an 11% decline. New listings were down nearly 20% from last October with 514 homes coming on the market in 2023 compared to 638 last year. New pending sales were down 10% in October, with 424 pending contracts compared to 470 last year. Inventory continues to be challenged as homeowners experience the “lock-in” effect of having very low existing mortgage rates. In the last 10 years, the average rate of mortgages in the Commonwealth fell from 5.2% to 3.8% as people bought homes or refinanced existing mortgages when rates sank to their lowest in history. As rates have increased over the last year, there is a huge delta between what mortgage rate homeowners have right now and what rate they would get if they moved. This delta locks them into their current properties as they wait for rates to come down before considering a move.
The tide may be turning on increasing mortgage rates as the Mortgage Bankers Association came out with their 2024 projections showing great news for 2024. “The mortgage rate is predicted to be in the low 6% range by the fourth quarter of 2024,” states FAAR Board of Director Sherrie Shaw. “Even better, 2025 rates are projected to be in the mid-5% range, which should really help in getting sellers off the sidelines.” A moderation in mortgage rates will help motivate move-up buyers to list their homes and ease the inventory crunch that has plagued the market for years now.