Despite a small increase in available properties for sale, statistics for May 2017 continue to demonstrate modest inventory levels. Year-over-year inventory is 7.99% lower than May 2016. Usually when inventory is low, it is a clear Seller’s market, but the increase in pending and closed sales shows Buyers are still in the game.
Residential active listings increased a slight 2.44% from the prior month but is still down 7.75% from May 2016 when inventory totaled 11,578, almost 1000 properties more than the current supply of 10,681 listings. Each of the region’s seven major cities (Norfolk, Virginia Beach, Portsmouth, Chesapeake, Suffolk, Hampton, and Newport News) experienced lessening properties available for sale year-over-year, with the most significant occurrences in Suffolk and Norfolk, down 14.73% and 9.81% respectively. Portsmouth isn’t far behind, down 9.49% from May 2016. The number of residential active listings has declined year-over-year for 22 consecutive months now (from August 2015 to May 2017). Prior to that period, the number of active listings increased year-over-year for 24 successive months (August 2013–July 2015), and before that, down year-over-year for 29 uninterrupted months (March 2011–July 2013). The usual increase in seasonal real estate activity may soon have a positive effect on the inventory but that remains to be seen.
The region’s months’ supply of residential homes inventory is currently sitting at 4.90 months, down 12.81% from May 2016 when it was 5.62 months. Virginia Beach continues to hold the lowest supply of the seven major cities, at 3.92 months in May 2017, while Portsmouth is the highest at 5.69 months. Most real estate economists agree that a 6-month supply of inventory represents a balanced market.
May’s residential pending sales are up 12.5% compared to the same period of time last year. 2,906 homes went under contract in May 2017, adding 323 new buyers from the previous month. The most significant gain from the major cities was experienced by Suffolk, with 36.55% more pending contracts than in May 2016. Norfolk continued to experience solid gains, up 33.20% year-over-year. Portsmouth and Virginia Beach, which returned negative year over year numbers in April 2017 returned positive percentages with a 15.09% and 2.82% increase respectively from May 2016.
Residential settled sales continued to rise year-over-year last month. May 2017 recorded 2,668 settled sales, up 6.81% from the 2,498 homes sold in May 2016. Of the major cities, Suffolk had the most sizable gain, rising 18.12%. Virginia Beach was the only city to experience a year-over-year decline, dropping 3.41%. The region’s residential median sales prices were up 1.69% from May 2016, at $230,000 and $226,188 respectively.
The number of distressed homes, those that are either short sales or foreclosure, continued to decrease. During May 2017, distressed homes accounted for just 10.56% of all residential properties. This was down 2.51% from the same period of time last year, and is the lowest percentage since REIN began tracking the data in August 2009. Similarly, May distressed homes accounted for only 11.43% of all residential settled sales, a decrease of 2.08% from May 2016.