The uncertainty of an unbalanced market can cause stress for home buyers and sellers — especially those attempting to navigate the market alone. But that is exactly the position many Hampton Roads consumers find themselves in. According to REIN, our area MLS, the market has seen a continued decline in listing activity, with a 49.21% change in active residential listing inventory year-over-year, with just 3,350 active listings in February 2021 compared to 6,596 in February 2020.
REIN MLS data confirms that the city of Virginia Beach and Chesapeake are the first two major cities in our region to have less than one month supply of inventory in this market. In these two locations – one coastal, one suburban – it would take less than one month to deplete all of the active residential inventory if no new properties were added to the market. Generally, six months of inventory is considered a balanced market. This is a clear indication that the demand for homeownership far outweighs the supply, specifically in these areas of Hampton Roads. In February, all seven major cities reported less than 1.65 months’ supply of inventory. For the entire MLS database, the current months’ supply of inventory is 1.16 months, down a significant 56.06% from 2.64 in February of 2020.
“Multiple offers put a lot of pressure on buyers, sellers, and real estate agents,” said Harry Cross, President of REIN’s Board of Directors. “Having advice and representation from a trusted agent is a critical component. The stress of an unbalanced market can cause some consumers to make ill-advised decisions, like not getting a home inspection or attempting to put their home on the market without proper representation, for example.”
As it relates to residential sales, Cross sees quite the opposite trend, which remained strong in February with 2,934 homes going under contract (an increase of 25.76% year-over-year), and settled sales rising 20.31% with 2,198 homes sold in February 2021 compared to just 1,827 homes sold in February 2020.
Like pending and settled sales being on an upward trend, new construction sales have also seen a year-over-year uptick in the past few months.
The median sales price for residential properties in the Hampton Roads region is $269,900, a 12.46% increase from this time last year. Due to record low inventory, some agents have reported multiple offer
situations for above-asking price, which is a likely contributor to the steady rise in sales prices. In February, the Peninsula cities had a median sales price of $244,500 with the Southside municipalities experiencing a slightly higher median sales price at $277,000.