Real estate market continues to recover

svaughan@vagazette.com

So far, 2016 is looking like a good year for people who want to buy or sell a house in greater Williamsburg.

While new listings in the first quarter of 2016 were up 13.8 percent from the first quarter of 2015, pending sales were up 22 percent. Closed sales were flat, as was time on the market at 82 days, according to sales figures provided by the Williamsburg Area Association for Realtors, covering zip codes 23185, 232188 and 23168, the greater Williamsburg area.

There was small drop in the median sales price of a single-family detached home, down 0.6 percent to $315,250, and a more significant drop in the median price of single family attached homes, down 17.2 percent to $192,000.The combined median sales price dropped from $290,000 to $275,000, still far above the state median. An "attached home' is one that shares a wall with another unit, as in many townhouse developments.

Linda Kinsman, executive director of the Realtor's association, said the sales prices moved slightly closer to list prices, meaning sellers are getting prices a little closer to their asking prices. "The percentage tends to hover in the 97-98 percentile," Kinsman said.

That adjustment, said Mary Beth Pauley, president of the Realtors group and an agent with Long & Foster, indicates a market in equilibrium.

"It's a balanced market," she said. "It's a good time for buyers, but sellers are getting most of what they want."

It's a change from the immediate post-recession market, when sellers had to drastically alter their ideas about price, because there was too little money in the market chasing too many available homes.

There are fewer houses for sale now.

"As of March end we're at 5.8 month's supply. This has steadily been declining since January when we were at 6.4 month's supply," said Kinsman. That means that if no more homes were listed for sale, it would take about 5.8 months to sell those already listed..

To put that in context, after the housing collapse of 2008, the area had more than a year's inventory on the market, a situation that caused prices to drop sharply.

"We're continuing to see a steady recovery," Kinsman said.

Pauley said financing is somewhat easier for buyers than it was in the immediate post-recession days, but still harder than in the boom period preceding the recession.

"I think lenders now have more programs they can use to make loans," she said. "However, the days of the 30-day close are over. We're moving to the 45-day close and lenders and title companies are getting used to that."

The increase in closing time is tied to new consumer information forms that were put in place to reduce the number of bad mortgages. The housing market is improving in the region in spite of the fact that economists such as Christine Chmura of Chmura Analytics, say the Hampton Roads economy is not recovering as fast as the economy in the rest of the state, particularly in Northern Virginia and Richmond.

Kinsman said she didn't think Hampton Roads was lagging the state in terms of its residential housing sales and cited a sales report from the Virginia Assocation of Realtors that showed Hampton Roads with a 9.3 percent increase in sales for the first quarter of 2016, higher than the state rate of 2.2 percent growth.

"Sales and prices increased year-over-year in the first quarter of 2016 and annualized sales show that the market is continuing to grow," according to the statewide report. " The first quarter of 2016 is the sixth consecutive quarter of growth in the annualized measure. Growth in annualized sales is a good indicator of long-term, sustained strengthening of the residential real estate market."

Overall, Virginia experienced a year-over-year increase in prices, with median sales price rising 1.9 percent 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," according to the statewide report.

Kinsman and Pauley said in greater Williamsburg detached houses in the $250,000-$350,000 range and attached homes in the $200,000-$300,000 range seemed to be moving fastest.

Dwindling inventory may lead to renewed residential construction in the area.

"We have 5.8 months of inventory," said Pauley. "If that continues to decline, then we will need some new inventory."

Williamsburg Planning Commissioner Elaine McBeth has said several projects approved before the recession were never been built, including townhouses and condominiums along High Street.

Most residential development in the city over the past few years has been in projects specifically designed as off-campus housing for students at the College of William and Mary.

Currently, there is a modicum of housing construction in Williamsburg.

"There are two large projects: Parkway Townhomes on Parkway Drive and Quarterpath Townhomes on Battery Boulevard," Williamsburg Planning Director Reed Nester said. "There may be a few scattered lots around town, but those are the places large scale construction is going on."

In James City County, planning of a residential development is underway at The Promenade, near the intersection of John Tyler Highway and Route 199. There are no large scale residential developments currently under construction.

The largest potential residential development in the area is the Quarterpath at Williamsburg tract owned by Riverside Health Systems. Time constraints relating to the certificate of need for the hospital led to Riverside Doctor's Hospital of Williamsburg being built first; it opened in May 2013. Market conditions prompted deferral of residential and commercial development. Aside from the currently under-construction Quarterpath Townhomes, up to 1,400 homes could be built in the portion of the 358-acre Quarterpath tract zoned residential.

Contact Vaughan at 757-345-2343.

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First Quarter Market Summary

2015 v. 2016

New listings: 552 v. 628

Pending sales: 327 v. 399

Closed sales: 277 v. 277

Median Sales Price: $290,000 v. $275,000

Median Day On Market:: 82 v 82

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