More sales and lower prices could prove encouraging for emerging residential developments in the city such as Quarterpath, pictured here. (Rodrigo Arriaza / Virginia Gazette)
Potential homebuyers in the Greater Williamsburg area have a lot to think about as the real estate market steadily improves during the first quarter of 2018, with more homes sold and at lower prices than in the first three months of 2017.
The Williamsburg Area Association of Realtors reports that 12 more single-family homes have been sold from January to March in Williamsburg, James City and York counties than in the first quarter of last year.
The group, which is comprised of more than 400 Realtors across the Greater Williamsburg area, covers Williamsburg, James City County, York County, New Kent County, Charles City County, Newport News, Hampton, Surry and Gloucester.
“I feel right now that we’re going to have another very good spring in terms of home sales,” said Lisa Noon, president and CEO of the Williamsburg Area Association of Realtors. “Overall, we’re looking to see 2018 be another good year.”
Michael Hartnett, Williamsburg branch manager for mortgage lending company PrimeLending, says he has seen an overall increase in interested homebuyers looking for mortgages across the Peninsula.
“I would say it’s definitely heating up,” Hartnett said. “What I do is I look at how many people are pre-approved and are looking for houses, and my pipeline of people who are ready to go to try and find a house is definitely bigger than last year.”
Hartnett says possible reasons for the increase in closed sales include a low inventory, which encourages potential homebuyers to act fast, as well as lower prices.
“People say they’re just looking, but all of a sudden, they decide to sign a contract,” Hartnett said. “They say they’re just going to look right now and come back later on, but while they’re here, they’re seeing that there’s just not a lot of inventory so if they see something they really like, they’re jumping on it.”
Average selling prices for single-family homes in Williamsburg and James City and York counties have gone down by $22,747 in the first three months of 2018 when compared to figures from last year. This marks the continuation of a downward trend in pricing that started last December, according to reports released by the area Realtors Association.
As a result, homes are selling faster, but for less. Homes across the Greater Williamsburg area sat on the market for an average of 43 days before being sold during the first quarter of 2018, a full three weeks less than it took for homes to sell during the same three month period in 2017.
Jay Mitchell, president of the Virginia Realtors Association, says this quick turnaround in sales matches a statewide trend.
“As you can tell, we’re already into a season where inventory is tight and properties are moving quickly,” Mitchell said. “There’s not a ton of inventory out there, so people are finding what they need if they’re lucky, and they’re getting what they want fairly quickly.”
Inventory has steadily improved in Williamsburg, James City and York counties since the beginning of the year, but numbers in the region are still recovering from the drop that followed the end of last year’s peak in the summer selling season. At the end of March, the three localities reported a combined inventory of 680 homes, which is well under the 793 homes on the market last August.
Mitchell says this drop in supply is partly due to homeowners deciding to expand their homes rather than put them on the market.
“A lot of people are comfortable with their house or they’re deciding that they want to do some improvements,” Mitchell said. “The economy, while it’s volatile, is pretty good, so they can say ‘I really like where I live, I think I’ll make some enhancements to the house I’m in and keep it.’ ”
Allen Barber, president of Johnson Mortgage Company, says entry-level homes in the $125,000 to $250,00 range tend to sell much faster than high-end luxury homes or those in gated communities such as Kingsmill or Governor’s Land.
“There seems to be plenty of product at the higher end of the market, and since prices have been hit pretty good over the last 10 years at the upper end of the market, they’ve never really recovered from 2006 back to their full values,” Barber said. “At the lower end of the market, supply is much, much tighter. There are very few houses on the market and a lot of times, there are multiple bidders for the same house.”
As far as the kinds of home proving to be market movers, Noon points to a recent surge in sales for entry-level attached homes at an average price of $240,694 across the region. On the other hand, average prices for detached houses sit at $373,728. She says recent retirees moving to the area have opted for condominiums rather than detached single-family houses.
“Interestingly, our detached market has been a little bit slower than our attached market,” Noon said. “We’ve got a really strong marketplace in the attached home sales — those are condos and townhouses — that are very popular in our area because we do have a lot of retirees … moving into the Williamsburg area.”
Despite sales performing well, recent increases to interest rates by the Federal Reserve may make those exploring the possibility of investing in a home cautious.
The Federal Reserve raised its key short-term interest rate by 0.25 percent in March, citing concerns about inflation. This marks the sixth rate increase since December 2015, and Noon says at least two more rate increases are expected this year. The current average for 30-year mortgage interest rates is 4.33 percent; and it was at 4.15 percent in 2017.
Sources agree that sales will begin to pick up in the transition into the summer months. This follows a typical yearly trend, where sales increase and the home supply improves during the summer selling season, then drops back off in the fall and into winter.
“The market should start picking up from here out,” Barber said. “The supply should get better because a lot of people want to move, especially families who like to move after school’s out, so you should start to see properties listed for the next couple of months that have not been on the market in the wintertime. I would think that we should get a little boost to our supply situation over the next couple of months, which will help the buyers.”
“Typically April is a month where we see a great deal of activity,” Noon said. “There are some good signs that April is probably going to be a very solid closed-sales marketplace.”
Greater Williamsburg area housing market at a glance:
City of Williamsburg numbers:
Jan. 2018: 13 new listings, 6 closed sales, $327,500 median sales price, 63 inventory
Jan 2017: 25 new listings, 8 closed sales, $307,808 median sales price, 66 inventory
Feb. 2018: 21 new listings, 8 closed sales, $227,500 median sales price, 64 inventory
Feb. 2017: 14 new listings, 8 closed sales, $259,750 median sales price, 57 inventory
Mar. 2018: 25 new listings, 7 closed sales, $257,500 median sales price, 67 inventory
Mar. 2017: 13 new listings, 17 closed sales, $280,000 median sales price, 55 inventory
James City County numbers:
Jan. 2018: 136 new listings, 62 closed sales, $290,000 median sales price, 444 inventory
Jan. 2017: 124 new listings, 64 closed sales, $336,881 median sales price, 405 inventory
Feb. 2018: 194 new listings, 93 closed sales, $305,000 median sales price, 485 inventory
Feb. 2017: 176 new listings, 73 closed sales, $289,600 median sales price, 453 inventory
Mar. 2018: 220 new listings, 109 closed sales, $314,000 median sales price, 530 inventory
Mar. 2017: 217 new listings, 104 closed sales, $339,300 median sales price, 450 inventory
York County numbers:
Jan. 2018: 44 new listings, 24 closed sales, $287,440 median sales price, 76 inventory
Jan. 2017: 30 new listings, 19 closed sales, $283,185 median sales price, 83 inventory
Feb. 2018: 54 new listings, 14 closed sales, $279,213 median sales price, 82 inventory
Feb. 2017: 34 new listings, 15 closed sales, $250,000 median sales price, 87 inventory
Mar. 2018: 46 new listings, 26 closed sales, $298,403 median sales price, 83 inventory
Mar. 2017: 32 new listings, 29 closed sales, $290,000 median sales price, 87 inventory
Arriaza can be reached at 757-790-9313 or on Twitter @rodrigoarriaza0.