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Demand for Inventory Continues to Outpace Supply

For the Hampton Roads real estate market, the supply of inventory continues to fall short of demand. Despite a 3.57% year-over-year increase in the number of new listings added to the region in May (4,846 in 2019 vs. 4,679 in 2018), in the end, the month closed with 7.32% fewer available properties for sale (all property types) than during the same period of time last year. 3,316 properties went under contract in May 2019, up 7.77% year-over-year. Add to that another 3,072 settled sales (up 7.34% year-over-year) and it becomes clear that sales are outpacing new listings coming on the market.

In May 2019, the region’s residential active listings dropped 8.03% year-over-year. This is the 46th consecutive month that active listings have declined year-over-year. Each of the region’s seven major cities (Norfolk, Virginia Beach, Portsmouth, Chesapeake, Suffolk, Hampton and Newport News) experienced a decline in inventory for the month, with Hampton and Virginia Beach undergoing the most significant decreases at 16.05% and 11.79% respectively.

May’s supply of residential home inventory is currently at 4.03 months, down 8.20% from May 2018. This is the 49th consecutive month that the months’ supply of inventory has declined year-over-year. Of the region’s seven major cities, Suffolk and Portsmouth are the only cities with a month’s supply over 4 months, which is still significantly below the six months that is typically considered a balanced market.

Residential pending sales for the region rose 7.15% year-over-year, with 3,176 homes going under contract in May. This continues the trend where 59 of the past 60 months have exhibited increases. While six of the region’s major cities experienced a boost in sales, three cities saw double digit gains: Portsmouth 20.61%, Newport News 16.67% and Hampton 16.59%. Chesapeake was the only major city to undergo a decline in residential pending sales, down 3.34% year-over-year. 

Similar to pending sales, May’s residential settled sales in the region also rose 7.31% year-over-year. In fact, just like with pending sales, Chesapeake was the only major city to experience a decline (down 9.45%) compared to May 2018. Suffolk, Hampton and Norfolk each saw gains just over 15%.

The area’s residential median sales price for May 2019 was $250,250, up 4.27% from May 2018 when it was $240,000. Suffolk was the only major city whose median price declined, down 3.64% year-over-year. All others rose between 4.52% and 10.54%.

The number of distressed homes in the Hampton Roads region, those that are either short sales or foreclosures, has significantly decreased. In May 2019, distressed homes accounted for just 5.89% of all residential settled sales, down 3.50% year-over-year, and the lowest recording in 11 years (since June 2008). Similarly, distressed homes accounted for only 7.13% of all residential active listings in May 2019, down 2.29% year-over-year and the lowest recording since REIN began tracking the data in August 2009.