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FOR IMMEDIATE RELEASE
Contact:  Carol Sondrini  
540-373-7711
news@faarmembers.com

 More of the Same in March for Local Real Estate Market
High prices, falling demand continue

 Fredericksburg, VA – (April 17, 2023) – The following analysis of the Fredericksburg, Virginia area housing market has been prepared by the Fredericksburg Area Association of REALTORS® based on analysis of brightMLS multiple listing data. 
March 2023 saw more of the same in the local real estate market with falling demand, rising prices, and increasing days on market.  Total sold dollar volume was down nearly 30% coming in at approximately $204.6 million compared to more than $289.1 million in March of 2022.  Units sold decreased by nearly 31% from last year with 452 homes sold in March versus 652 last year.  Despite the continued dip in demand, prices rose more than 3% year-over-year, settling at $420,000 this year compared to $406,500 in March of 2022.

FAAR Board of Director Meghan Kala comments, “March really proved itself to be the kick start to the spring real estate market, and our buyers are out in full swing.  Many buyers who put the brakes on last year have chosen not to wait any longer on the volatile interest rates.  They are stepping out into the growing pool of consumers in a low inventory market.  Because of this, we’ve been seeing multiple offer situations, buyers waiving home inspections, and the return of appraisal gap coverages.  Smart and prepared sellers should be able to cash in on their advantages as we continue into the busy months ahead!”

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 106% up to 37 days this March compared to just 18 days last year. 

Inventory was up 23% in March, finishing out the month with 693 active listings compared to 562 last year.    New listings were down nearly 37% from last year with 948 homes coming on the market in March of 2022 compared to 602 this past month.  New pending sales were down nearly 36% in March, with 509 pending contracts compared to 795 last March. 

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About the Fredericksburg Area Association of REALTORS®
Founded in 1957, the Fredericksburg Area Association of REALTORS® (FAAR) is the trade association for more than 1,700 Realtor® and affiliate members serving the City of Fredericksburg, the Counties of Caroline, King George, Orange, Spotsylvania, and Stafford, along with the Colonial Beach area of Westmoreland County. Members also work in the surrounding counties of Westmoreland, Louisa, and Prince William and in Northern Virginia.  For more information about FAAR, visit www.faarmembers.com or contact Kim McClellan, Public Policy Director at kmcclellan@faarmembers.com or 540-373-7711.

January 2023 saw demand crater compared to the highs of early 2022, but prices continued to rise with sizable jumps in nearly every locality.  Units sold is the big story for this past month with more than 35% fewer homes changing hands than last year.  January 2022 saw 468 units sold while this January saw a drop to 303 homes.  Despite falling demand, prices continued to rise with a 6% year-over-year increase from $396,000 in January of last year to $419,900 in January of this year.  Total sold dollar volume was down 30%, going from approximately $202,6 million last year to $142,4 million this year.

The decline in demand was most pronounced in the counties of Caroline, Orange, and Stafford, with Caroline posting a 50% decline in homes purchased.  Supply continues to remain constrained so interestingly, prices skyrocketed in Caroline at the same time, posting a 35% gain from last January with a median price of nearly $400,000.  Orange County posted a 41% volume decline but also saw prices increase 9%.  Stafford County saw a whopping 42% decline in sales but still managed to post a 6% increase in median price.

FAAR Board of Director Randy Walther comments, “Overall the market is surprisingly stable.  If it’s on the market, it sells. Very few properties are slow to sell but buyers seem to have regained some leverage. There is more negotiation between the parties than there was six months ago, and sellers are more open to some concessions to close a deal. The market is not frantic and that is beneficial to both sides. Sellers seem to have more confidence that if they sell there will be something out there for them to buy. On the other hand, buyers are more confident that they will find a suitable home even if it’s not their first choice.  Interest rates have peaked and are starting to fall, which bodes well for an active spring market.”

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 46% up to 38 days this January compared to 26 days last year.  This is a big difference from the consistent lows we were seeing with averages of about 5 to 10 days on market for most of 2020 through mid-2022.  The additional time from those lows gives buyers a little more breathing room to make purchase decisions.

Inventory is up nearly 50% from the historic lows of the last few years, finishing out the month with 722 active listings compared to just 484 last January.    New listings remained nearly constant with a slight 3% increase over last January while new pendings declined by about 6%.  Walther continues, “Winter is traditionally a slower time in the market and spring seems to hold promise for both sides of the transaction. All indications point to an active market for the foreseeable future. Once again, it shows the resiliency and strength of the Fredericksburg region.”

The Fredericksburg regional housing market continues to show signs of a softening market, but prices remain stubbornly high in many jurisdictions.  Total sold dollar volume took a staggering 37% drop this November coming in at approximately $193.5 million compared to more than $305 million last November.  That decline was fueled by a more than 42% reduction in sales from the previous year with 715 homes being sold in November of 2021, compared with just 412 this November.  Despite cratering sales, median price remained high coming in at $424,715 which represents a nearly 8% year-over-year increase from last year’s median sales price of $395,000. 

“Volatile interest rates led to a decline in the number of buyers actively looking for homes,” comments FAAR Board of Director Abby Fitzsimmons.  “Fewer buyers looking led to more inventory available.  This shift has given buyers the leverage to win contracts with home inspections and even some seller subsidies, something that buyers have not seen in the previous crazy seller’s market.  Although buyers have some leverage, home values remain stable.  A few months ago, buyers were having to offer more than list price and waive appraisals or pay for appraisal gaps.  Instead of homes going above list price now, they are selling for list price with concessions.  Homes that are over-priced are sitting.  Interest rates fell slightly towards the end of the month, but this is coinciding with the start of the holiday season, so we’ll see if those buyers will start looking again or wait until after the holidays,” concludes Fitzsimmons.

While median price rose for yet another month at the regional level, individual jurisdictions are seeing both plummeting sales, and in some cases, falling prices.  Caroline and Orange counties, along with the City of Fredericksburg and the Town of Colonial Beach, all posted year-over-year price declines in November.  However, King George, Stafford, and Spotsylvania counties all saw price increases.  Spotsylvania County was a notable standout with a nearly 14% increase in median price in November going from $370,000 last year to $420,000 this 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, increased another 35% this October, coming in at 27 days versus 20 last year. 

Active listings jumped nearly 40% over last year with 974 homes on the market at the end of November 2022 versus 704 last year.  While the number of active listings is a constantly changing number, dipping below 1,000 homes available demonstrates how competitive even this changing market remains with low supply.  The market is still several hundred homes short of where it was at the end of 2019.  New listings were down again this month, with 537 new homes coming on the market compared to 668 last November.  New pendings remain down with 400 new contracts ratified in November compared to 636 last year, representing a nearly 38% year-over-year decline.