The local real estate continues to moderate from its meteoric rise over the last two years.  While prices remain high and inventory remains below historical trends, the market continues to slow with double digit decreases in sold volume and units sold and double digit increases in days on market.  Total sold dollar volume was down nearly 14% in August of 2022 going from more than $362 million last summer to just over $313.4 million this August.  Units sold decreased 21% with nearly 200 hundred less homes sold this August versus last year.  There were 876 home sales in August of 2021 compared to 691 in August of this year. 

FAAR Board Member Matthew Rathbun comments, “The market is complex and its interpretation can largely differ based on the price-range and type of property that a consumer is seeking to buy or sell.  We still suffer from a lack of inventory in the mid-level to affordable housing price ranges.  Some sellers are still experiencing multiple offers and favorable terms in the average priced markets.  Buyers and Sellers need to speak to an experienced and professional REALTOR® to get an idea of how the market will impact the seller or buyer in their unique position.”

Median price remains high, clocking in at $427,000 versus $390,000 last August, representing a nearly 10% year-over-year increase.  While prices remain high, the market is seeing trends that indicate we could be approaching a point where prices will start to moderate as sellers ask more than buyers are willing to pay.  Since early 2020, sellers had been consistently getting 100% if not more than their asking price, however that trend has started to reverse with August seeing sellers receiving on average 98.7% of asking price.

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, increased a staggering 83% this August, coming in at 22 days versus just 12 last year.  This increase puts days on market more in line with historical trends for August, which sits at 26 days.

Rathbun continues, “Higher priced homes and the luxury market are seeing extended days on the market as most buyers in that range have elected to remain in place and not move up.  Buyers are regaining some control of the buying process as they did prior to 2020 and benefitting from reasonable and competitive negotiation positions, home inspections and housing options.  Sellers are still seeing strong offers by well-qualified buyers at or near asking price, when asking for a fair market price.”

Active listings continue to increase, jumping 8% over last year with 979 homes on the market at the end of August 2022 versus 901 last year.  The market is still seeing about 300 less homes on the market than the 5-year average for August, but supply is coming back to levels that local agents are used to seeing.  New listings were down again this month, with 722 new homes coming on the market compared to 941 last August.  New pendings remain down with 591 new contracts ratified in August compared to 849 last August, representing a 30% year-over-year decline.  

The local real estate market in May showed signs of cooling, with the largest year-over-year decline in units sold since 2017 and the first drop in total sold volume in years.  While demand may be abating due to rising interest rates, inflation pressures, and economic uncertainty, prices continue to skyrocket in many markets.  May closed out the month with a more than 6% decrease in total sold dollar volume, going from approximately $365 million in May of 2021, down to just over $343 million in May of 2022.  Fueling the decline in total volume was a steep decline in market activity.  Units sold declined nearly 16%, going from 889 in May of 2021 and declining to 749 in May of 2022.  At the same time that demand is waning, median sold price posted another big year-over-year jump, clocking in at $436,000 in May of 2022 compared to $390,000 in May of 2021. 

FAAR Board of Director Lauren Tate comments, “The May 2022 market is seeing a slight shift.  While inventory remains low, it is starting to become a more level playing field for buyers, impacting demand due to the increase of mortgage rates.  In previous months, sellers held the cards pulling multiple contracts, driving over list price offers to exclude enticing key contract elements such as waived appraisals, appraisal gaps, no contingencies and no seller contributions to sway the seller to pick the best offer.  Today we are seeing inventory remain on the market slightly longer with price adjustments, which is confusing those sellers who have expectations that the market will mimic previous months. The market will continue to level out due to the uncertain economic changes.”

The decline in units sold was seen in every jurisdiction in the FAAR footprint.  Orange County was down the least from last year with a 6% decline while Caroline County took the biggest hit with a nearly 42% decline in units sold.  These declines translated into a decrease in total sold dollar volume in all areas but one.  Spotsylvania County managed to hold onto a near identical sales volume as May of 2021, with a scant 0.08% increase.  Despite decreasing sales volume, prices are staying high in all of our jurisdictions.  Caroline County saw its third highest median price on record coming in at $320,000 while Spotsylvania’s median price skyrocketed over 21%, coming in at $443,000 in May compared to $365,505 last year. 

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, stayed flat from last year at 11 days.

Active listings have shown year-over-year growth since July of 2021 with May posting another 46% increase in homes on the market.  There were 838 homes on the market at the end of May compared to 573 last year.  New listings were down this May by about 15%, with 1,024 new homes coming on the market compared to 1,200 last May.  New pending sales were down over 23% and overall pending sales are down 30%, indicating that continued supply challenges