Second Quarter 2017 in the greater Augusta County area displayed promising activity across the board. The continued available housing inventory crunch has many buyers and their agents in a tailspin, with sellers reaping the rewards. Our sweet slice of Virginia’s residential activity noted an increase in Average Sales Prices and Market Volume, as well as a decrease in how long properties are available to purchase, (Days on Market).
Average Sales Prices have increased ~7% from 2Q 2016. As previously mentioned, low supply has been a major contributor. Low mortgage interest rates, (with the impending increases in the near future), and the availability of attractive low down payment & “no money” down loan products have also helped fuel 2017’s Spring market activity. With that said, we continue to see buyers needing cash at closing, and negotiating a portion of their closing costs into the sales contract. (51% of buyers last quarter received, on average, $4900 from seller proceeds, attributed to their financial responsibilities at settlement.)
In the chart below, you will see the affect of low supply measured in what is called an “absorption chart”. The “absorption rate” calculates the amount of existing & available inventory with the rate of sales. The absorption rate displays how long it would take to sell the currently active inventory, if no other “for sale” properties were added. This provides us with an overall reflection of our broader area market conditions. The chart below displays that we have been in a normal market since August of 2016…
Absorption rates can differ dramatically depending on the location, condition, price range, etc. In 2Q, the majority of our market area sales, 64%, were within the $100,000 – $250,000 price range. This price range had an absorption rate of 5.5 months, (hovering in a “seller’s market”). Here is the price bracket/absorption breakdown for the month of June…
- New listings in the $100k – $199,999 range.
- Properly priced homes in all price ranges.
- Low interest rates and low-to-no down payment mortgage financing options.
- Foreclosures represented only 7% of 2Q residential sales. (Down 1% from 2Q 2016.)
- 2 – 5 acre Augusta County land sales
- Taylor Swift’s new video…(ummm, personally, I haven’t seen it yet, but my 8 year old child says it is a-w-e-s-o-m-e.)
- Over-Priced Properties (Oh, its happening alright…Sellers and their agents trying to find that perfect balance between house price inflation and not-leaving-money-on-the-table).
- Buyer’s house hunting struggle is reeeeaaaaaal.
- Lender appraisals trying to keep up with the increase in market values.
HOW DID WE COMPARE WITH THE REST OF VIRGINIA?
Click on the link for the Commonwealth’s full 2Q 2017 report, compiled by Virginia REALTORS… Virginia Home Sales Report 2Q 2017
* This report was prepared by and for the use of Katherine McNicholas, Westhills Ltd. REALTORS. It is not to be copied in whole or in part without explicit permission of author.*
* All data based on information from the Greater Augusta Association of REALTORS®, Inc. or Multiple Listing Service for the period 04.1.17 through 06.30.17. All information is believed to be accurate, but cannot be guaranteed.*