FEBRUARY 2020: Residential Real Estate Market Recap – Augusta County, Waynesboro & Staunton

 

02.2020_SNAPSHOT

RESIDENTIAL SALES

02.2020_SalesTransactions

 

  •  The number of sales hit an all-time high in 2005, with a total of 1598 closed transactions and a low in 2010, with 935. the market has gradually improved since then…with 2019 surpassing 2005’s sales;
    •  2015 = 1489 sales
    •  2016 = 1511 sales
    •  2017 = 1581 sales
    •  2018 = 1573 sales
    •  2019 = 1747 sales
  •  2020 has began mimicking the past, with the organic holiday downshift. (Fyi* Last year’s Spring market sales were strong in April. Displaying the initial buying take off beginning in March.) Comparable strong sale #’s pushed through-out the 2019 year. Feb ’20 (88) is a FLAT compared to last Feb ’19 (88).
  • Feb 2020 12 Mo. Running Total (1844) displays a slight 5 home DECREASE over last month’s total of (1850), and a 10.6% INCREASE from Feb 2019’s 12 Mo. Running Total (1668 sales).

LOW HOUSING INVENTORY

02.2020_Inventory

 

How low can you go?…Historic lows in inventory began back in 2016, truly felt the impact during the 3Q 2016 buying season. the end of 2016 deemed itself a “price adjusting” year, cleaning out stale properties. since then, the inventory has continued to be squeezed, opening-up a tinie bitin the Spring market…but swallowed up quickly & further depleted until the end of each year. In 2020, our inventory is at its lowest with 305 active properties.

  • Feb 2020 with 305 properties is a 13% < Feb 2019 (350) which is 32% < Feb 2018 (450) which is 49% < Feb 2017 (595) which is 59% < Feb 2016 (735).

AVERAGE SALES PRICES

02.2020_AveSalesPrice

 

With low supply, comes high demand…reflected in the increase in Sales Prices. We noticed an average of 7% INCREASE over the course of last year, (varying higher/lower depending on the price bracket.) Feb 2020’s ASP ($234,121) is a 3.1% INCREASE from Feb 2019 ($227,046) and a huge 15.5% INCREASE from last month, Jan 2019 ($202,633).

The 12 Month ASP is a more accurate predictor of sales trends. Feb ’20 12 Mo ASP ($227,596) displays a 5.3% INCREASE when compared to last year’s 12 Mo ASP ($216,130). This is a more consistent with last month’s approximate year-over-year 12 Mo ASP’s 6% INCREASE. Overall, we have flattened out for the moment. The good news is that with the steady gains since 2016, many properties are back to their 2005-2007 market values.

Unfortunately, what is NOT factored into the average sales price, is the trend of Seller paid closing costs. 47% of February 2020’s sales included the Seller paying, on average, $5154 towards the Purchaser’s settlement fees at closing.

DAYS ON MARKET

02.2020_DOM

 

Average Days on Market (DOM) for 2005 was 101 days. and steadily increased to an all time high of 177 days in April 2013. Low inventory has considerably dropped this number. 2019’s yearly average was 55 days, with a median DOM of 20 days. (* Normal Market is considered to be 90 days.)

  •  Feb 2020 STATS: Average 58 days / Median 26 days
  •  % of Feb Sales “Under Contract” within..
    •  15 Days or less = 57%
    •  30 Days or less = 63%
    •  45 Days or less = 67%

Interestingly, the active properties for Feb 2020 have been on the market 144 DOM. That’s 86 more days than the SOLD DOM for the month. Indicating, that most properties properly priced are moving quickly, while the others are sitting on the market getting stale.

 

[The information presented is deemed accurate, but not guaranteed. Data sourced from the Greater Augusta Association of REALTORS (GAAR) for Residential, Single Family homes in Augusta County, Waynesboro & Staunton Virginia; YTD 2020.]

JANUARY 2020: Residential Real Estate Market Recap – Augusta County, Waynesboro & Staunton

2020_SNAPSHOT

RESIDENTIAL SALES

01.2020_SalesTransactions

  •  The number of sales hit an all-time high in 2005, with a total of 1598 closed transactions and a low in 2010, with 935. the market has gradually improved since then…with 2019 surpassing 2005’s sales;
    •  2015 = 1489 sales
    •  2016 = 1511 sales
    •  2017 = 1581 sales
    •  2018 = 1573 sales
    •  2019 = 1747 sales
  •  2020 has began mimicking the past, with the organic holiday downshift. (Fyi* Last year’s Spring market sales were strong in April. Displaying the initial buying take off beginning in March.) Comparable strong sale #’s pushed through-out the 2019 year. Jan ’20 (95) is a 6.7% INCREASE compared to last Jan ’19 (89).
  • Jan 2020 12 Mo. Running Total (1850) displays a slight 5 home DECREASE over last month’s total of (1845), and a 10.6% INCREASE from Jan 2019’s 12 Mo. Running Total (1668 sales).

LOW HOUSING INVENTORY

01.2020_Inventory

How low can you go?…Historic lows in inventory began back in 2016, truly felt the impact during the 3Q 2016 buying season. the end of 2016 deemed itself a “price adjusting” year, cleaning out stale properties. since then, the inventory has continued to be squeezed, opening-up a tinie bitin the Spring market…but swallowed up quickly & further depleted until the end of each year. In 2020, our inventory is at its lowest with 335 active properties.

  • Jan 2020 with 335 properties is a 11% < Jan 2019 (375) which is 27% < Jan 2018 (460) which is 41% < Jan 2017 (565) which is 55% < Jan 2016 (750).

AVERAGE SALES PRICES

01.2020_AveSalesPrice

With low supply, comes high demand…reflected in the increase in Sales Prices. We noticed an average of 7% INCREASE over the course of last year, (varying higher/lower depending on the price bracket.) Jan 2020’s ASP ($202,633) is a 12.6 DECREASE from Jan 2019 ($232,049) & a 16% DECREASE from last month, Dec 2019 ($243,458).

The 12 Month ASP is a more accurate predictor of sales trends. Jan ’20 12 Mo ASP ($227,451) displays a 6% INCREASE when compared to last year’s 12 Mo ASP ($214,869). this is a more consistent with last month’s approximate year-over-year 12Mo ASP’s 7% INCREASE. Overall, we have flattened out for the moment. The good news is that with the steady gains since 2016, many properties are back to their 2005-2007 market values.

Unfortunately, what is NOT factored into the average sales price, is the trend of Seller paid closing costs. 52% of January 2020’s sales included the Seller paying, on average, $4578 towards the Purchaser’s settlement fees at closing.

DAYS ON MARKET

01.2020_DOM

Average Days on Market (DOM) for 2005 was 101 days. and steadily increased to an all time high of 177 days in April 2013. Low inventory has considerably dropped this number. 2019’s yearly average was 55 days, with a median DOM of 20 days. (* Normal Market is considered to be 90 days.)

  •  Jan 2020 STATS: Average 45 days / Median 20 days
  •  % of Jan Sales “Under Contract” within..
    •  15 Days or less = 41%
    •  30 Days or less = 64%
    •  45 Days or less = 70%

Interestingly, the active properties for Jan 2020 have been on the market 143 DOM. That’s 100 more days than the SOLD DOM for the month. Indicating, that most properties properly priced are moving quickly, while the others are sitting on the market getting stale.

 

[The information presented is deemed accurate, but not guaranteed. Data sourced from the Greater Augusta Association of REALTORS (GAAR) for Residential, Single Family homes in Augusta County, Waynesboro & Staunton Virginia; YTD 2020.]

2017 Residential Sales Recap: Greater Augusta County Area

LOW SUPPLY -and- HIGH DEMAND: Residential Real Estate 2017 Review

Similar to 2016, 2017 was very much a “price adjusting” year.  The Valley experienced residential market sales growth, despite restricted & historically low housing inventory. High buyer confidence & demand elevated sales prices, and dramatically decreased days on market. It was a great year to be a seller, and a struggle to be a buyer.  A more detailed, localized look below…

2017_SNAPSHOT

INCREASE IN SALES TRANSACTIONS & VOLUME

The Greater Augusta Area experienced yet another increase in year-over-year sales when compared to last year.  2017 closed 1613 transactions; a 6.8% increase from 2016’s number, (1511 sales). This is the second consecutive year of sales growth. (2016 experienced a similar increase of 6% when compared to 2015.)  2017’s Total Market Volume displays this growth in sales and increase in Sales Price; reflecting a 13% increase from last year.

2017_QUARTERLY_COMPARISON_SALES

2017_MONTHY_SALES

The highest number of sales occurred during 2Q, (475 total transactions.); May was the highest selling month with 184 sales; and as expected, January & February tied for the slowest, with 85 sales each. (Yet 1Q 2017 still noted a solid 9% increase over 1Q 2016). Aside from the natural recycling of households upsizing & downsizing in the market, we have noticed a large segment of buying clientele from our neighboring larger, faster growing cities. They are starting to discover the easy commute, slower-paced lifestyle, and more affordable real estate this area has to offer. In all areas, its been a challenge being a buyer looking for a home in the $200,000 and under price range. (More on the that topic below…)

LOW INVENTORY

So, the big story of low housing inventory continued in 2017. The decrease in supply began in the Fall of 2015, became historic in February 2016 and continued to drop…

2017_MONTHY_INVENTORY

Low inventory means not-a-thang if you don’t have home buyers…Fortunately, we DO have buyers, as seen in the past two years of sales growth…(I mean, who wouldn’t want to live here!?) Locally, we started to feel the crunch in August 2016,  when our absorption rate* dropped into a “seller’s market”, which continued for the entirety of 2017.

2017_ABSORPTION_CHART

[*Absorption Rate = the rate at which available homes are sold in a specific real estate market during a given time period. It is calculated by dividing the average number of sales per month by the total number of available homes.]

The absorption rate can very useful when calculating more specific perimeters. 2017’s Price by the Slice displays the majority of homes sold were within the $100,000 – $250,000 price range, (representing 65% of the market.) The year ended with this price point having an absorption rate of 3.4 months; basically, there are more buyers than available homes for purchase. (Versus the higher price slice of $350,000 – $400,000, which had an absorption of 8.5 months.)

INCREASE IN MEDIAN & AVERAGE SALES PRICE

The chart below illustrates 2017’s monthly average sales prices compared to previous years.  We ended 2016 on a strong note, and 2017 continued the pattern into summer, with a slight dip in 4Q. Even with the 4Q average price decrease, this year we experienced an overall 6% increase in Average Sales Price, and a 3% increase in Median Sales Price.

2017_MONTHLY_AVE_SALES_PRICE

2017_QUARTERLY_COMPARISON_PRICE

DAYS ON MARKET

Days on Market for properties dropped significantly over the course of the year; Average DOM dropped from 99 Days in 2016 to 77 Days in 2017; Median days on market decreased to 36 days! (A normal market is considered to be around 90 DOM).

Much of the stale inventory, with their higher Days on Market from last year, were flushed, and replaced with aggressively priced properties. Property sellers & listing agents alike have been testing  buyers and their pain threshold when it comes to pricing. No one wants to leave money on the table…appropriate pricing and quick adjustments to the current market have been key in keeping DOM down. With that said, Homebuyers, (AND their agents), were, (still are), scrambling to get into desirable available inventory as soon as possible, making competitive offers in “highest & best” scenarios.

(The struggle is REAL ya’ll…I have actually left my house in such a rush, accidentally still wearing my slippers, in the middle of boiling water for dinner, to meet clients at a newly listed house this past year. Truth.)

Here’s another way of looking at Days on Market, and how it compares to most recent years…

2017_DOM

 

INCREASE IN LAND SALES

So, how are buyers reacting to lack of existing housing?…They decided to BUILD. Check out the chart below, s’il vous plais…

2017_LAND_SALES

Even with the continued rise of lumber & building supply pricing, the National Association of Home Builders reported that 46 states experienced a growth in single-family permits. [The National Association of Home Builders  is a great resource for more information. Here is a link to their informative blog, NAHB Eye on Housing.]

INTEREST RATES…What happened and what’s in the future?

The first 10 months of 2017, mortgage rates remained low by historical standards (Exhibit 7).  Can you imagine paying 18%!!!! I have no clue how my parents did it. Anyhoo…Mortgage rates increased over 0.5 percentage points for the 30-year fixed mortgage, right after the  U.S. general election in November of 2016. They remained above four percent through the first quarter of 2017. Then drifted down in March, the 30-year fixed mortgage has remained under four percent since July (Exhibit 8). Low mortgage rates are the one factor helping to support homebuyer affordability.

 

FREDDIEMAC_RATE_chart2

Interest Rate Charts courtesy of Freddie Mac.

What’s in the future? Most likely the rates will increase over the next 2 years, but at a much more modest speed than in the past, remaining “borrower-friendly” low. I’ll leave it to the experts, the Freddie Mac ECONOMIC & HOUSING RESEARCH GROUP to provide a more thorough and entertaining explanation…

We’re in an era of historically low mortgage interest rates and the expectation is that interest rates have nowhere to go but up. But how quickly will rates increase and how high will they go? If they do rise, what will be the effects on home buyers, homeowners wishing to refinance, mortgage lenders, home builders, and real estate agents? To answer these questions, it’s helpful to review periods when interest rates spiked and analyze the effects, with the hopes of understanding what might happen in the coming years. It’s the next best thing to a crystal ball. CLICK HERE to read Freddie Mac’s INSIGHT article: Nowhere to go but up? How increasing mortgage rates could affect housing.

**Looking for a broader point-of-view? I got ya covered. Here’s a link to VIRGINIA HOME SALES REPORT – 4Q & 2017 Year End Report.

 

Happy House Hunting – Katherine

 

* 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 01.1.17 through 12.31.17. All information is believed to be accurate, but cannot be guaranteed.*