Though residential sales in the Hampton Roads region continue to exhibit year-over-year increases, the margins for those increases were noticeably reduced in March 2018. Contributing factors most likely stem from the prolonged decline in active inventory.
Residential active listings for the region were down 8.67% year-over-year in March 2018, with 9,244 available homes. Despite this being 348 more available listings than the prior month, the area’s active inventory has declined year-over-year for 32 consecutive months. Each of the region’s seven major cities (Norfolk, Virginia Beach, Portsmouth, Chesapeake, Suffolk, Hampton and Newport News) experienced decreased inventory ranging from 3.84% (Virginia Beach) to 17.83% (Norfolk).
March’s supply of residential home inventory in the region is currently 4.11 months, down 12.37% from the same period of time last year. After three consecutive months (December 2017-February 2018) with the supply of inventory below 4 months, it crept back up slightly in March. Real estate economists describe a balanced market as 6 months’ supply of inventory. In comparison, the Hampton Roads region has been below a six months’ supply since November 2015, and it has declined year-over-year since May 2015.
Residential pending sales have risen year-over-year for 46 consecutive months (since May 2014). March 2018 recorded a modest increase of 5.17%. The year-over-year margin of increases has been declining each year. March 2015 had a surge of 24.73% y-o-y, March 2016 saw a 20.48% y-o-y growth, and March 2017 a 14.97% y-o-y change. By comparison, this year’s 5.17% increase is mediocre. 2,806 homes went under contract in March 2018 compared to 2,668 during the same time in 2017. Hampton, Norfolk and Chesapeake experienced the largest gains (21.91%, 15.49% and 11.79% respectively), while Virginia Beach, Newport News, Portsmouth and Suffolk underwent declines ranging from 1.10% to 6.88%.
Residential settled sales also experienced year-over-year growth in March 2018, up 1.75% for the region. Similar to pending sales, the margin of the year-over-year increases for settled sales has been sliding. March 2015 saw a 29.76% y-o-y rise, March 2016 only a 5.30% y-o-y change, March 2017 was up 4.99% y-o-y, and this year is only a 1.75% increase. Of the region’s seven major cities, Newport News and Suffolk were the only cities to experience a decline in settled sales in March, down 16.59% and 7.14% respectively. All other major cities had increases ranging from .70% to 6.09%.
The region’s residential median sales price rose a modest 4.59% in March 2018 to $230,000, as compared to $219,900 in 2017. All of the major cities experienced gains in median sales price ranging from .11% (Suffolk) to 32.93% (Portsmouth), except for Hampton which was down 4.51%.
Distressed homes, those that are either short sales or foreclosure, continue to decrease as a percentage of the market year-over-year. During March 2018, distressed homes accounted for just 11.09% of all residential active listings. This was down 1.08% from the same period of time last year, and the lowest percentage rating in 8 months. Similarly, March’s distressed homes accounted for 11.09% of all residential settled sales, a decrease of 3.69% from March 2017, and the lowest percentage in 6 months.