News

February 2022 was a record-setting month with the area’s median price eclipsing $400,000 for the first time in history.  The local market continues to be very challenging for buyers and for sellers who don’t have a well-defined next step.  FAAR Board Member Michele Freemyers states, “January and February closings numbers were down due to an overall decrease in the number of units sold. Monthly contracts bear the signs of a very difficult buyer’s market, with waivers of financing contingencies, appraisals, and home inspections.  Waivers of termite, well and septic inspections are even becoming the norm along with a significant number of cash buyers.”

Sold dollar volume was up in February nearly 10%, jumping from approximately $181 million last February to nearly $200 million this year.  The increase in volume was fueled by a more than 17% increase in median sold price, with homes in February of 2022 seeing a median price of $410,000 compared to $349,950 in February of 2021.  That is a doubling in median price from 10 years ago.  In March of 2012, the median sales price was $195,000, and had increased from just $159,900 ten years before that.  The swift pace of price increases is more than many buyers can handle, which led to a year-over-year decrease in units sold this February compared to last year.  In February of 2021, 487 houses were transacted compared to 457 this year, a more than 6% drop. 

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 44% with houses averaging 23 days on the market in February 2022 compared to the incredibly low 16 days in 2021.

Overall active listings continued to show modest improvement with 23% more homes on the market this February compared to last year, but these are still very low numbers.  In February of 2021, there were just 360 homes for buyers to choose from and the market closed this February with 446 homes.  For comparison, there were 1,140 homes for sale in February of 2020 and many agents would have said that was not providing adequate choice for a lot of buyers.

Adding to challenges in the market are many of the negotiable terms that are being agreed upon by buyers and sellers.  “The other concerning trend is many contracts allow far less than the standard thirty days for settlement,” continued Freemyers.  “Often less than twenty-one days are given from ratification to closing, with significant rent back time periods up to sixty days. These shortened timelines put increased stress on the overall transaction, and the participants involved, as many sellers have back-up contracts with higher sales prices, so extensions of settlement dates are unlikely.”  All of these challenges are leading to reduced units sold and longer days on market as buyers are balking at the strenuous nature of transactions in the current climate and the steadily increasing prices. New pending contracts were up in February indicating that demand is still high, but overall pendings were down nearly 9% showing that buyers are feeling frustrated and some are pulling back.

January 2022 continues to see the same issues that have been plaguing the local real estate market for many months, namely low supply.  A lack of choice in the market coupled with steadily rising prices and a brutal blast of winter led to decreased sales in the month and a significant decline in pending sales.  Despite the factors working against the market, total sold volume and prices both climbed handily.  January closed out with a total sold dollar volume of approximately $202.6 million which represents a nearly 10% increase over January of 2021.  The market saw a significant 15% year-over-year increase in median price, going from $345,000 in January of 2021 to just shy of $400,000 at $396,000 this January.  Units sold decreased for only the second time since May of 2020, coming in at 468, a nearly 4% decrease from last January’s total of 486. 

FAAR Board of Director Randy Walther comments, “This winter has seen the market become lean and mean. Homes for sale have fallen to record lows in terms of supply. While some of this is seasonal, a portion is outright fatigue from the stress of the past year or two. It’s difficult for some sellers to motivate themselves to prepare their home for the market when they realize that finding a new place could be a long, drawn-out endeavor. However, if they do move forward, they are more often than not seeing good returns for their effort. Current buyers, on the other hand, seem to be active but not fixated on a quick result. There may be fewer people looking in the winter so it’s not as hectic of a market. Realtors® are doing a good job of helping both sellers and buyers understand the present landscape.”

Most jurisdictions in the FAAR footprint saw a decrease in units sold with the City of Fredericksburg leading the way at a 40% reduction.  January of 2021 saw 43 sales, compared to 26 this year.  Caroline County also saw a steep decline, with over 27% fewer sales than last January.  Stafford County saw a modest increase of 9% but two of our most rural jurisdictions, Orange County and Colonial Beach, saw sizable increases in units sold at 20% more and 38% more respectively, compared to last January.  Orange County saw 63 sales this January compared to 53 last year, while Colonial Beach had 22 this year compared to 16 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, increased 30% up to 26 days.  While it’s still a brief amount of time considering historical real estate trends, it is still double the number of days at the lowest part of the market from July of 2021, which stood at just an average of 1o days on the market. 

Inventory remains low, but was still up 22% from last year’s historic bottom of supply.  There were just 396 homes on the market at the end of January 2021.  That number ticked up to 484 homes at the end of this January, but the good news was tempered by a more than 23% reduction in new listings coming on the market.  In January of 2021, 600 sellers put their homes up for sale.  In January of 2022, just 461 new listings came onto the market.