WINCHESTER — Despite battling a lack of inventory, real estate numbers continued to rise in 2019.
“When the inventory is low people don’t want to sell, so there’s nowhere to go to. It’s kind of a crazy cycle that goes on and on. That’s where we’ve been since 2017,” Mike Cooper, principal broker with Cornerstone Business Group, said. “But some communities sell a whole bunch in lower price ranges, and businesses come in and bring people in. I think when people realize there’s a reason to sell, they’ll put their house on the market. We still just need more inventory.”
Regionally, sales numbers have remained steady despite having about half as much inventory as desired, he said.
“Our market (Winchester/Frederick County) runs best when we’re running between 500 to 600 homes that are already built,” Cooper said. “You find we really don’t have more than maybe 300 houses available to be purchased today.”
Inventory continues to vary on a daily basis, Cooper said.
According to data from Virginia Realtors’ year-end report for 2019, 126,305 homes were sold in Virginia in 2019, up 3.4% from the previous year. The median price for homes sold was also up in 2019, hitting $295,000 statewide, an uptick of 3.5%. That number has increased between 2 and 3.5% over the past five years, according to the report.
Regionally, 1,693 units were sold in Frederick County, 764 were sold in Warren County, 717 were sold in Shenandoah County, 333 were sold in Winchester and 206 were sold in Clarke County, according to data from Bright MLS, which provides market data to real estate brokers.
Those numbers in all but Clarke County were up from 2018 despite issues with inventory across the board, and Clarke’s total was only down by nine units.
“One of the contributors that can help (sell homes despite inventory issues) is that builders are building new houses. But if you’re purchasing a home that has to be built, it takes 90-120 days,” Cooper said. “Some neighborhoods are building spec homes, and those can be sold quick. People changing jobs and improving their lifestyle helps, too.”
The median sale price rose to $371,000 in Clarke, to $270,000 in Frederick, $245,000 in Warren and $199,000 in Shenandoah. Winchester showed a median sale price of $224,000, which was down by $11,000 from 2018.
“There is a sweet spot that a home can be listed in to acquire a full price offer or even higher offer,” Cooper said. “I just listed a townhouse in Stephens City. It is my townhouse. I went in and improved everything that I knew would not push me into that ‘over-the-limit’ upgrades and improvements. It was beautiful on the first day of list and received five offers and sold for full price. I did have multiple offers over list, but the one I accepted was really the better deal based on when it would close and the profit it would bring. That was a perfect 100% sold at-list scenerio.”
Homes sold faster in 2019 statewide, the Virginia Realtors’ report said, with an average of just 49 days on the market.
Regional numbers hovered around the statewide mark, with homes mostly being sold within 30 days, according to Bright MLS data. There were 1,023 units sold in Frederick County within 30 days, 389 units sold within 30 days in Warren County, 354 units sold within 30 days in Shenandoah County and 113 units sold within 30 days in Clarke County. Winchester sold 191 units within 30 days.
“There tends to be an attitude by many that you should list above the likely sale price in order to give room for negotiations, but that doesn’t always work out well. Sometimes, because the property is overpriced, it simply sits on the market. The longer it sits, the less likely it will sell for close to list price,” Cooper said. ”In every area, a property that sells at 181-plus days, sold 80-90% of the original list price. An overpriced house ultimately costs the seller money. It is better to find out what the market is doing and get as close to that price as possible.”
Mortgage rates remain in good shape as housing market growth continues. As of Wednesday, the rate for a 30-year-fixed rate was 3.51% while a 15-year fixed rate was 2.98%, a 5/1 ARM rate was 3.29%, a 30-year fixed jumbo mortgage was 3.53% and a 30-year fixed refinance rate was 3.51%, according to bankrate.com.
According to the Virginia Realtors report, mortgage rates likely will not rise “significantly,” and 30-year fixed rates are likely to stay at or below 4%.
The statewide employment rate has helped with the housing market, the report suggested. Virginia added 42,200 jobs from November 2018-2019, helping lead to a 2.5% unemployment rate in November 2019. In some parts of the state, the report said, the unemployment rate is under 2%.
That, in turn, helps boost consumer confidence. The index of present conditions was 174.4 in December 2019, while the future index was 102.9, according to the report. An index score over 100 generally shows optimism.
While overall inventory could likely still see a decline, the 2020 market should see success, the Virginia Realtors report indicated.
“Virginia’s housing market will continue to perform well into 2020, with continued price growth and stable sales. The biggest challenge will continue to be a lack of inventory. However, as prices continue to climb, more homeowners may be enticed to list their homes in 2020,” the report said. “With a ramp-up in new construction, potential move-up buyers should see slightly more options. Overall, therefore, signs point to a strong housing market in 2020, albeit one that still tends to favor sellers over buyers.”
