2016-Q1 Virginia Home Sales Report

2011 2016

Quarter QUARTER

second Fsecond I R S T Quarter

VIRGINIA VIRGINIA Home HomeSAleS SAleSRepoRt RepoRt

Analysis by the Virginia Center for Housing Research at Virginia Tech

®®, ® Published byby Virginia association reaLtors the advocate forfor Published Virginia association of reaLtors , the advocate Published by Virginia association ofof reaLtors , the advocate for real estate professionals and property owners Virginia. real estate professionals and property owners in Virginia. real estate professionals and property owners inin Virginia.

Virginia Quarterly Home Sales Report

2016-Q1

The Virginia Association of REALTORS® (VAR) publishes monthly and quarterly home sales reports to provide our members, the media and real estate-related industries with current data. The report data comes from a variety of sources and is analyzed by the Virginia Center for Housing Research at Virginia Tech. All data may be used with citation to the proprietary owner, the Virginia Association of REALTORS®.

The data presented is based on specific economic regions comprised of counties and independent cities in Virginia, as detailed in the map below. However, it should be noted that these regions do not necessarily align with the counties and cities that comprise the 27 primary local REALTOR® associations in Virginia. For example, the economic region defined as Northern Virginia encompasses more counties and cities than those within the bounds of the Northern Virginia Association of REALTORS®. Please take this into consideration when referencing regions.

Economic Regions

Central Valley: Central Virginia:

Hampton Roads / Chesapeake Bay:

Northern Virginia:

Roanoke / Lynchburg / Blacksburg:

Albemarle, Augusta, Bath, Buena Vista City, Charlottesville City, Fluvanna, Greene, Harrisonburg City, Highland, Lexington City, Nelson, Rockbridge, Rockingham, Staunton City, Waynesboro City Amelia, Buckingham, Charles City, Chesterfield, Colonial Heights City, Cumberland, Dinwiddie, Goochland, Hanover, Henrico, Hopewell City, King and Queen, King William, Louisa, New Kent, Nottoway, Petersburg City, Powhatan, Prince Edward, Prince George, Richmond City, Sussex Accomack, Chesapeake City, Franklin City, Gloucester, Hampton City, Isle of Wight, James City, Lancaster, Mathews, Middlesex, Newport News City, Norfolk City, Northampton, Northumberland, Poquoson City, Portsmouth City, Southampton, Suffolk City, Surry, Virginia Beach City, Williamsburg City, York Alexandria City, Arlington, Caroline, Clarke, Culpeper, Essex, Fairfax, Fairfax City, Falls Church City, Fauquier, Frederick, Fredericksburg City, King George, Loudoun, Madison, Manassas City, Manassas Park City, Orange, Page, Prince William, Rappahannock, Richmond, Shenandoah, Spotsylvania, Stafford, Warren, Westmoreland, Winchester City Alleghany, Amherst, Appomattox, Bedford, Bedford City, Botetourt, Campbell, Covington City, Craig, Floyd, Franklin, Giles, Lynchburg City, Montgomery, Pulaski, Radford, Roanoke, Roanoke City, Salem City

Southside Virginia:

Brunswick, Charlotte, Danville City, Emporia City, Galax City, Greensville, Halifax, Henry, Lunenberg, Martinsville City, Mecklenburg, Norton City, Patrick, Pittsylvania

Southwest Virginia:

Bland, Bristol City, Buchanan, Carroll, Dickenson, Grayson, Lee, Russell, Scott, Smyth, Tazewell, Washington, Wise, Wythe

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 2

Virginia Quarterly Home Sales Report

2015-Q4

First Quarter Market Summary Sales and prices increased year-over-year in the first quarter of 2016 and annualized sales show that the market is continuing to grow. The first quarter of 2016 is the sixth consecutive quarter of growth in the annualized measure and has increased nearly 9% since the first quarter of 2015. Growth in annualized sales is a good indicator of long-term, sustained strengthening of the residential real estate market.

The number of sales in Virginia in the first quarter of 2016 increased 2.2% over the first quarter of 2015. Regional changes were varied. The Hampton Roads/Chesapeake Bay region, Central Valley and Northern Virginia saw 9.3%, 10.1% and 10.6% increases respectively, while other regions experienced more modest increases or marginal decreases in sales.

Regional changes in price were less varied. Changes in price ranged between an increase of 3.8% in the Central Valley and a decrease of 0.7% in the Roanoke/ Lynchburg/Blacksburg region, with the exception of Southside and Southwest Virginia. Southside and Southwest Virginia often experience more pronounced fluctuations because the number of sales in each region is relatively low, reflecting low population density. Overall, Virginia experienced a year-overyear increase in prices, with median price rising 1.9% to $249,000.

Mortgage interest rates continued to decrease in the first quarter of 2016 and the Virginia unemployment rate reached a post-recession low in March. Both of these indicators create a favorable context for home-buying. If inventory keeps up with demand, this spring selling season may be one of the strongest Virginia has seen since the recession.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Virginia Month-to-Month Sales Trends Single Family Homes, Townhomes, Condos 2013

2014

2015

2016

Number of Single Family, Townhome and Condo Sales

14,000

12,000

10,000

8,000

6,000

4,000

2,000

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Sep

Oct

Nov

Dec

Month

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

2013

5,528

5,922

7,460

8,669

10,483

10,810

10,389

10,154

8,185

7,950

6,949

7,559

2014

5,377

5,667

7,109

8,467

9,647

10,643

10,172

9,482

8,354

8,445

6,650

8,297

2015

5,777

6,058

8,488

9,122

10,366

12,680

11,818

10,202

9,560

8,862

7,014

8,739

2016

5,879

6,475

8,417

There were approximately 8,417 home sales in March 2016, mirroring the sales in March 2015. Since the year-over-year difference is so small, it is important to note that closings are reported over time and therefore the current count is likely to be lower than the actual number of sales in March. Sales increased 33% from February to March of 2016 and Virginia can expect continued increases in monthto-month sales throughout the spring season, as long as the for-sale inventory keeps up demand.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Virginia Quarterly Residential Sales Single Family Homes, Townhomes, Condos

35,000

Number of Single Family, Townhome and Condo Sales

32,168

31,580

29,962

30,000

28,757

28,728

28,008

24,615

25,000

23,392 22,458 21,509

20,771

20,323 20,000

18,910

+2.2% YOY

18,153

15,000

10,000 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 Quarter

The number of home sales in the first quarter of 2016 was 2.2% higher than the number of sales in the first quarter of 2015. First quarter sales are the lowest of the year but the year-over-year increase indicates that the market continued to grow in the beginning of 2016. Annualized sales (page 6) also indicate continued growth.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Virginia Annualized Residential Sales Single Family Homes, Townhomes, Condos

120,000

Number of Single Family, Townhome and Condo Sales

110,000

107,463

108,686 109,205

103,891 99,109

100,000

100,058 99,301

98,096

95,292

90,978

97,376

98,310

100,480

+8.7%

91,832

90,000

80,000

70,000

60,000

50,000 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 Quarter

Each data point on the graph above includes 12 months of home sales data ending in the quarter shown. For example, the 2016-Q1 figure (109,205 sales) includes home sales from February 2015 through March 2016. This rolling sum of home sales can provide a clearer indicator of long-term trends in Virginia’s housing market.

The annualized sales measure increased 8.7% over the past year. The first quarter of 2016 was the sixth consecutive quarter of growth in this measure, however quarter-to-quarter increases are getting smaller. Sustained growth in this measure is a good indication of improved long-term performance and growth in the residential real estate market. The continually decreasing unemployment rate, along with decreasing interest rates may boost second-quarter sales, as long as for-sale inventory increases along with demand.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Regional Changes in Sales 2015-Q1 vs. 2016-Q1 Units

Northern Virginia +10.6% Central Valley +10.1%

Central Virginia +0.3%

Roanoke / Lynchburg / Blacksburg +6.8% Southwest Virginia -5.3%

Hampton Roads / Chesapeake Bay +9.3%

Southside Virginia -1.3%

Region

2015-Q1

2016-Q1

Central Valley

1,007

1,109

Central Virginia

3,419

3,429

Hampton Roads / Chesapeake Bay

4,851

5,304

Northern Virginia

7,733

8,550

Roanoke / Lynchburg / Blacksburg

1,627

1,737

Southside Virginia

374

369

Southwest Virginia

282

267

All of Virginia

19,293

20,765

The chart above compares 2015-Q1 sales reported by mid-April 2015 to 2016-Q1 sales reported as of April 12, 2016, by region. This point-in-time comparison shows a larger increase in sales statewide than the numbers that are updated historically (page 5). The greatest year-over-year increases in sales occurred in Northern Virginia, the Central Valley, and the Hampton Roads/Chesapeake Bay region. The Roanoke/Lynchburg/Blacksburg region experienced more modest increases in sales and Central Virginia experienced a very minor increase. Southside Virginia, and Southwest Virginia both experienced a year-over-year decrease in sales.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 7

Virginia Quarterly Home Sales Report

2016-Q1

Virginia Median Residential Sales Price Single Family Homes, Townhomes, Condos

$350,000

$249,000

$255,000

$265,000

$259,990

$244,467

$255,000

$259,000

$267,000

$235,000

$249,000

$254,000

$233,000

$250,000

$241,000

Median Sales Price

$269,900

$300,000

+1.9%

$200,000

+6.9% $150,000 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 Quarter

The 2016-Q1 median sales price is 1.9% higher than the 2015-Q1 median sales price and 6.9% higher than the 2013-Q1 median sales price. The 2016-Q1 median sales price is 2.4% lower than the 2015Q4 median price. This decrease from the fourth quarter to the first quarter is small compared to the previous three years and the increase in median price from February to March was relatively high.

Relatively steep increases in price this spring may indicate that for-sale inventory is becoming limited.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 8

Virginia Quarterly Home Sales Report

2016-Q1

Regional Changes in Median Sales Prices 2015-Q1 vs. 2016-Q1

Northern Virginia +0.5% Central Valley +3.8%

Central Virginia +2.0%

Roanoke / Lynchburg / Blacksburg -0.7% Southwest Virginia -10.8%

Southside Virginia +9.0%

Hampton Roads / Chesapeake Bay +1.5%

Region

2015-Q1

2016-Q1

Central Valley

$200,000

$207,500

Central Virginia

$196,000

$200,000

Hampton Roads / Chesapeake Bay

$202,000

$205,000

Northern Virginia

$365,000

$366,950

Roanoke / Lynchburg / Blacksburg

$154,950

$153,900

Southside Virginia

$78,000

$85,000

Southwest Virginia

$110,750

$98,800

All of Virginia

$244,467

$249,000

Median sales price increased year-over-year throughout the state, with the exception of the Roanoke/ Lynchburg/Blacksburg region and Southwest Virginia. Year-over-year changes in median price were essentially static in Northern Virginia and the Roanoke/Lynchburg/Blacksburg region. Southside Virginia experienced the largest increase in price, but a small number of sales in Southside and Southwest Virginia often makes fluctuation in median price more pronounced. Overall, changes in price were relatively modest across all regions, in keeping with the moderate change in the median price for the state.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 9

Virginia Quarterly Home Sales Report

2016-Q1

Virginia Quarterly Residential Sales Volume ($B) Single Family Homes, Townhomes, Condos

12

10.78

11

10.22

9.91

10

9.54

Billions of Dollars of Residential Sales

9.30

9.06

9

7.82

8

7

6

7.40 6.93 6.45

6.34

6.21 5.50

5.36

+2.1% YOY

5

4

3

2

2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1 Quarter

This graph illustrates the dollar value of residential real estate sold (in billions) during each quarter over the past three years. The volume of real estate sold in the first quarter of 2016 ($6.34B) increased 2.1% over the first quarter of 2015 ($6.21B). The 2.1% year-over-year increase in sales volume reflects similar changes in prices and the number of sales.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 10

Virginia Quarterly Home Sales Report

2016-Q1

Virginia Price Distribution Of Residential Home Sales Single Family Homes, Townhomes, Condos 2015-Q1 $2M +

31 37

19%

$1.5M - $2M

58 60

3%

219 223

$1M - $1.5M

Price Range

2% 510 509

$750K - $1M

2016-Q1

-0.2% 1,835 2,051

$500K - $750K

1,669 1,916

$400K - $500K

12%

15% 2,895 3,079

$300K - $400K

6% 4,539

$200K - $300K

5,074

12%

5,125 5,418

$100K - $200K 2,417 2,404

0 - $100K

0

500

6%

-1%

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 8,500 Number of Single Family, Townhome and Condo Sales

Year-over-year home sales in the first quarter of 2016 increased in nearly every category. Sales in ranges below $750,000 represent the vast majority of transactions in Virginia and serve as the best indicator of market performance. Sales decreased slightly in the lowest range (0-$100,000) and the $750,000 to $1 million range, reflecting limited inventory.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 11

Virginia Quarterly Home Sales Report

2016-Q1

Virginia Average Days On Market Single Family Homes, Townhomes, Condos

100

90

88

92

91

89

80 71

71

73

78

73 68

70

Average Days On Market

83

81

80

60

68

-6.4% YOY

50

40

30

20

10

0 2012-Q4 2013-Q1 2013-Q2 2013-Q3 2013-Q4 2014-Q1 2014-Q2 2014-Q3 2014-Q4 2015-Q1 2015-Q2 2015-Q3 2015-Q4 2016-Q1

Quarter

Average days on the market decreased 6.4% year-over-year. The 2016-Q1 average is the lowest average Virginia has experienced in the first quarter since the Great Recession. Low days on the market in the first quarter when inventory is generally limited may be a sign of high demand, but also may indicate that buyers are snapping up homes as they go on the market because inventory is especially limited.

Average days on the market increased from the fourth quarter of 2015 to the first quarter of 2016, following the usual seasonal trend—for-sale units tend to linger on the market in the late winter.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Monthly Residential Sales VIRGINIA (All MLS-Reported Home Sales*)

UNITED STATES (Existing Home Sales*) 600,000

16,000

14,000

500,000

12,000 400,000

10,000 8,000

6,000

314,000

281,000

300,000

6,781

6,391

200,000

4,000 100,000

2,000 0

Jan-15

Feb-15

Mar-15

Apr-15

May-15

Jun-15 (p)

Jul-15 (p)

Aug-15 (p) Sep-15 (p) Oct-15 (p) Nov-15 (p) Dec-15 (p) Jan-16 (p)

0

Feb-16 (p)

The changes in the pace of Virginia home sales were similar to the changes in the pace of sales in the United States as a whole in the first quarter of 2016. Note that national sales data has not yet been released for March.

Monthly Residential Median Sales Price VIRGINIA (All MLS-Reported Home Sales*)

UNITED STATES (Existing Home Sales*) VIRGINIA (All MLS-Reported Home Sales*)

$350,000

$350,000

$300,000

$300,000

$250,000

$242,600

$237,750

$200,000

$210,800

$198,600 $150,000 $100,000

$250,000 $200,000

$150,000

Jan-15

Feb-15

Mar-15

Apr-15 (p)

May-15 (p)

Jun-15 (p)

Jul-15 (p)

Aug-15 (p)

Sep-15 (p)

Oct-15 (p)

Nov-15 (p)

Dec-15 (p)

Jan-16 (p)

Feb-16 (p)

$100,000

The Virginia median sales price fluctuated more than the median of existing-home sale prices in the United States as a whole in the first two months of 2016. Virginia experienced a more pronounced decrease from December to January, after a more pronounced increase from November to December of 2015. Virginia experienced a typical increase in prices from January to February of 2016, while the U.S. experienced a decrease. *Virginia sales reported in the graphs above include all single family, townhouse, and condo sales. U.S. sales are existing single family sales as reported by Realtor.org. Existing sales do not include newly constructed homes sold for the first time.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

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Virginia Quarterly Home Sales Report

2016-Q1

Virginia Unemployment Rate Source: Bureau of Labor Statistics

6% 6% 6% 5% 5% 5% 5% 5% 4% 4% 4%

5.8% 5.3%

5.5%

5.4%

5.3%

5.2% 4.9%

4.8%

4.9%

4.7%

4.8% 4.2%

2013-Q1

2013-Q2

2013-Q3

2013-Q4

2014-Q1

2014-Q2

2014-Q3

2014-Q4

2015-Q1

2015-Q2

2015-Q3

2015-Q4

4.1% 2016-Q1

2015-Q1 unemployment rate based on preliminary February 2015 data.

Unemployment Rates by State, Seasonally Adjusted, March 2015 (U.S. rate = 5.0 percent)

9.0% and over 8.0% to 8.9% 7.0% to 7.9% 6.0% to 6.9% 5.0% to 5.9% SOURCE: Bureau of Labor Statistics Local Area Unemployment Statistics

4.0% to 4.9% 3.9% or below

The United States unemployment rate remained unchanged at 5% from November 2015 to March of 2016. Many states’unemployment rates improved, while a few states experienced higher unemployment rates. The Virginia rate decreased by one-tenth of a percentage point from November to February. The Virginia unemployment rate decreased to 4% in March, the lowest Virginia has experienced since July of 2008.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 14

Virginia Quarterly Home Sales Report

2016-Q1

Average 30-Year Mortgage Interest Rates Source: FreddieMac

4.6% 4.44%

4.4%

4.30%

4.2%

4.36%

4.23%

4.14%

4.0%

3.97%

3.8% 3.6% 3.4%

3.72%

3.69%

3.83%

3.95%

3.90%

3.74%

3.50%

3.2% 3.0% 2013-Q1

2013-Q2

2013-Q3

2013-Q4

2014-Q1

2014-Q2

2014-Q3

2014-Q4

2015-Q1

2015-Q2

2015-Q3

2015-Q4

3.1%

3.1%

2015-Q3

2015-Q4

2016-Q1

Average 15-Year Mortgage Interest Rates Source: FreddieMac

3.6% 3.5%

3.4%

3.4%

3.4%

3.2%

3.3%

3.3%

3.2%

3.0% 2.8%

2.7%

3.0%

3.1%

2015-Q1

2015-Q2

3.0%

2.9%

2.6% 2.4% 2.2% 2.0% 2013-Q1

2013-Q2

2013-Q3

2013-Q4

2014-Q1

2014-Q2

2014-Q3

2014-Q4

2016-Q1

Both 30-year and 15-year mortgage interest rates decreased from the fourth quarter of 2015 to the first quarter of 2016. The average 30-year mortgage interest rate decreased more substantially and since this is the rate that the vast majority of home-buyers will be able to take advantage of, its decrease may have triggered increased sales of more modestly-priced homes in the first quarter. Decreasing interest rates will continue to encourage potential buyers.

Published by the Virginia Association of REALTORSÂŽ Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 15

Virginia Quarterly Home Sales Report

2016-Q1

The Virginia Association of REALTORS® (VAR) is the largest professional trade association in Virginia, representing approximately 31,000 REALTORS® engaged in the residential and commercial real estate business. VAR serves as an advocate for homeownership and private property rights and represents the interests of real estate professionals and property owners in the Commonwealth of Virginia.

Note: The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

All inquiries regarding this report may be directed to: Martin Johnson Virginia Association of REALTORS® Martin@VARealtor.com 804-249-5708

Published by the Virginia Association of REALTORS® Analysis by the Virginia Center for Housing Research at Virginia Tech

Page 16