FAAR Homes Sales Report

Virginia Home Sales Report Fourth Quarter and Year-End 2018

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FAAR Home Sales Report

2nd Quarter 2019

Fredericksburg Area Association of Realtors® Market Report Key Takeaways

Economic Conditions Strong job growth in the Fredericksburg region continues, though gains at the end of 2018 were

concentrated in a few sectors.

Interest rates are even lower now than they were at the beginning of the year, and there is no indication of significant increases in the months to come.

Housing Market Conditions Sales activity increased in the 2nd quarter compared to last year, the first gain in more than a year

for the FAAR region. There were 2,212 sales overall, up 2% from a year ago, an increase of 38 sales. Most of the additional sales were in Caroline County and Orange County.

The median home price in the FAAR footprint surged 9% in the 2nd quarter, rising nearly $25,000 from a year ago to $309,948. This is the fastest price increase of any quarter in more than four years. The price growth occurred in all jurisdictions in the region.

Homes are taking more than a week longer to sell on average (+10 days) in the region. This trend

has emerged in recent months and could signal softening demand in some local areas.

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1,960 More jobs in the FAAR footprint between Dec-2017 and Dec-2018

3.0% Is the unemployment rate in the FAAR area in May-2019, which is up from Apr-2019

183.2 Is the present situation consumer confidence index level for the South Atlantic region economy in May-2019, which is up from one year prior

123.7 is the consumer expectations index level for the South Atlantic region economy in May-2019, which is up from one year prior

38 More home sales in the FAAR footprint in Q2-2019 compared to last year.

$24,948 Increase in median sales price in the FAAR area in Q2-2019 compared to a year ago.

$43 Million more in total sold dollar volume in the FAAR footprint in Q2-2019 relative to last year.

10 Days higher average days on market for the FAAR area in Q2-2019 compared to a year ago

3.7 Months of supply in the FAAR housing market in Q2-2019, which is down from a year ago

Key Trends Dashboard, FAAR

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Economic Overview

Job growth in the Fredericksburg region continues to be quite strong. In 2018, the region (defined as the City of Fredericksburg & the Counties of Spotsylvania, King George, Caroline, Stafford, Orange, and Westmoreland) added nearly 2,200 jobs. Between December 2017 and December 2018 (the latest data available), the region gained 1,960 jobs.

Sectors across the economy generally experienced job growth in 2018. However, between December 2017 and December 2018, the growth was more concentrated in certain sectors. The Other Services sector, which includes personal services, such as barbers and salons, as well as religious organizations and other non-profits, posted a gain of 869 jobs. The Construction sector and the Transportation and Warehousing sectors also added jobs (+545 jobs and +235 jobs, respectively). The Real Estate sector also added 131 job in December. The region’s largest economic sectors—namely, the Retail Trade and Health Care sectors—remained relatively unchanged in December.

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Figure 1 Annual Change in Jobs, FAAR

Source: Virginia Employment Commission, Quarterly Census of Employment and Wages

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Figure 2Job Change by Industry

FAARDec-2017 to Dec-2018

Ranked by Size

Source: Virginia Employment Commission, Quarterly Census of Employment and Wages

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The unemployment rate in the Fredericksburg region was 3.0% in May, up slightly from April but lower than it was earlier in the year. The region’s unemployment rate is slightly higher than the state rate (2.9%) but lower than the overall U.S. unemployment rate (3.4%).

Consumer confidence in the South Atlantic region remains positive. The measure of confidence in consumers’ present situations edged up to 183.2 in June, while the index of expectations remained at about 124. When these measures are above 100, it indicates that consumers remain optimistic about their economic prospects.

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Figure 3Unemployment Rate

May 2019

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Source: U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics

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Interest rates remain very low. In the third week of July, the 30-year fixed-rate mortgage rate was 3.81%, down slightly from a month ago. All signs point to continued low interest rates throughout the summer market.

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Figure 4Consumer ConfidenceSouth Atlantic Region

Source: The Conference Board

Present Situation

Expectations

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Figure 5Mortgage Interest Rates

Weekly, Not Seasonally Adjusted

30-Yr Fixed 15-Yr Fixed 5/1-Yr AdjSource: Federal Reserve Bank of St. Louis

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The national housing market continues to perform fairly well, although price increases continue to outpace increases in income, indicating an affordability issue in some markets. Existing home sales have been above the 5 million level since 2013 and have been relatively level over that 6-year period. New home sales have been more volatile, with a long slow trend upward, although dropping from a peak annual rate of 705,000 in March to 626,000 in May.

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Figure 6U.S. New and Existing Home Sales

Source: U.S Census Bureau, National Association of Realtors

Existing Homes (Left Axis)

New Homes (Right Axis)

000's 000's

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Housing Market Overview

After a slow start to the year, the FAAR housing market is showing signs of growth in the 2nd quarter. There were more sales than a year ago, the first gain in more than a year for the region. In addition, home prices rose in all Counties in region, signaling the low supply of active listings continues to play a role in the roader FAAR footprint. The median sales price in the FAAR region climbed nearly $25,000, which is the fastest price growth in more than four years. The rising sales and prices led to strong growth in sold dollar volume in the 2nd quarter, which grew by more than $43 million from last year. Home are taking more than a week longer to sell on average (+10 days) in the region. The supply of active listings continues to shrink, and is down 13% from last year, which is 351 fewer listings on the market.

The strong job growth and low unemployment in the region will likely keep buyers active in the market in the coming months. However, as prices continue to rise and the supply remains low, there could be affordability issues in some local markets, particularly with first time home buyers in the region.

Sales

After four consecutive quarters of declining sales activity, there was an uptick in sales in the 2nd quarter in the FAAR footprint. There were 2,212 sales throughout region, which is 38 more than the 2nd quarter of last year, a 2% gain. Most of the sales growth occurred in Caroline County and Orange County this quarter. Sales activity was flat in Spotsylvania County and declined slightly in Fredericksburg compared to last year.

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2,236 2,174 2,212

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Figure 72nd Quarter Home Sales, FAAR

2015-2019

+13%

Source: Virginia REALTORS®, data accessed July 17, 2019

+10%+2%-3%

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Caroline County: There were 178 sales in the County during the 2nd quarter, which is up 15% from a year ago, an increase of 23 sales. Prior to this sales growth, the level of sales had been declining in Caroline County for four consecutive quarters.

Fredericksburg: After an uptick at the start of this year, sales activity continued to decline in the City. There were 90 sales in Fredericksburg in the 2nd quarter, 6 fewer than a year ago, representing a 6% drop.

King George County: Sales activity in the County declined by 10% in the 2nd quarter compared to last year. There were 104 sales in King George County, 11 fewer than a year ago.

Orange County: There were 207 sales in Orange County in the 2nd quarter, which is 24 more sales than last year, a 13% gain. This is the first solid sales growth in the County since the summer of 2017.

Spotsylvania County: Sales activity in the County continues to be stagnant compared to last year, a trend that began in the the spring of last year. There were 706 sales in Spotsylvania County in the 2nd quarter, 3 fewer than a year ago.

Stafford County: There were 829 sales in Stafford County in the 2nd quarter, an increase of 15 sales from this time last year, representing a 2% gain. Sales activity has been relatively flat or declining in the County for several quarters in a row.

Westmoreland County: After relatively strong growth in the 1st quarter, sales activity in the county moderated in the 2nd quarter. There were 98 sales in Westmoreland County during the 2nd quarter, 4 fewer than last year, which is a 4% decline.

Local Snapshot – Total Home Sales

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Jurisdiction 2018 - Q2 2019 - Q2 % Change

Caroline County 155 178 15%

Fredericksburg 96 90 -6%

King George County 115 104 -10%

Orange County 183 207 13%

Spotsylvania County 709 706 -0.4%

Stafford County 814 829 2%

Westmoreland County 102 98 -4%

Source: Virginia REALTORS®, data accessed July 17, 2019     

Figure 8 Change in Sales by Jurisdiction

FAAR 2nd Quarter 2018 to 2nd Quarter 2019

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Sales Prices

Home prices in the FAAR region are on the rise after starting the year relatively flat. At $309,948, the 2nd quarter median sales price jumped up nearly $25,000 from a year ago. This is the fastest price growth the region has had in any quarter in more than four years. The rising home prices occurred in all local markets within the FAAR footprint. The median sales price in the region’s two largest markets, Stafford County and Spotsylvania County, rose 6% each, climbing $22,000 and $16,500 respectively. The low supply of active listings on the market and strong economic conditions in the region are likely playing a role in the price growth.

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Figure 92nd Quarter Median Sales Price, FAAR

2015-2019

Source: Virginia REALTORS®, data accessed July 17, 2019

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Caroline County: At $229,925, the 2nd quarter median sales price in the County climbed nearly $20,000 from last year, representing a 9% jump. Price growth continues to be consistent and strong. The median sales price has not fallen in the County since the spring of 2016.

Fredericksburg: The median sales price in the City rose approximately $26,000 from a year ago to $366,250 in the 2nd quarter of 2019, an 8% gain. Home prices have been trending up in Fredericksburg for 9 of the last 10 quarters.

King George County: Price growth continues in the County after moderating in the 1st quarter. At $320,040 the median sales price in King George County is up 7% from last year, a $20,000 increase.

Orange County: Sales prices continue to trend up in the County, which has been consistent now for three years. The median sales price in the 2nd quarter in Orange County was $259,900, which is $20,400 more than last year, a 9% gain.

Spotsylvania County: Of all jurisdictions in the FAAR footprint, Spotsylvania County has had the most consistent price growth over the past four years, climbing between 2% to 8% nearly every quarter. At $291,445, the 2nd quarter median sales price in the County is up 6% from last year, a gain of over $16,500.

Stafford County: At $363,000, the median sales price in the County rose $22,000 from last year, a 6% gain. Besides a modest drop last quarter, prices have been trending up for 4 years.

Westmoreland County: Home price have now been rising in the county for a year and a half. At $195,000, the median sales price is up 3% from a year ago, a gain of $5,050.

Local Snapshot – Median Sales Price

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Jurisdiction 2018 - Q2 2019 - Q2 % Change

Caroline County $210,000 $229,925 9%

Fredericksburg $339,900 $366,250 8%

King George County $299,900 $320,040 7%

Orange County $239,500 $259,900 9%

Spotsylvania County $274,900 $291,445 6%

Stafford County $340,995 $363,000 6%

Westmoreland County $189,950 $195,000 3%

Source: Virginia REALTORS®, data accessed July 17, 2019       

Figure 10 Change in Median Sales Price by Jurisdiction

FAAR 2nd Quarter 2018 to 2nd Quarter 2019

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Sold Volume

The increase in sales transactions and the rising price levels led to a big gain in the sold dollar volume this quarter. There was approximately $723 million of sold volume during the 2nd quarter in the FAAR region, which is 6% more than last year, an increase of nearly $43 million. Prior to this gain, the sold dollar volume in the FAAR market had been relatively flat since the spring of 2018. The Caroline County and Orange County local markets had notable sold dollar volume growth this quarter. Sold volume in Caroline County jumped more than $10 million (+32%), and Orange County had about $7.5 million additional sold volume in the 2nd quarter compared to last year (+15%). The 2nd quarter sold volume level in the FAAR footprint is close to a quarter billion dollars ($219 million) higher than it was in the 2nd quarter four years ago, a reflection of rising home values and expansion in the regional housing market.

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Figure 112nd Quarter Sold Dollar Volume (Millions), FAAR

2015-2019

Source: Virginia REALTORS®, data accessed July 17, 2019

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Caroline County: The sold dollar volume continues to trend up this year for the County after moderating much of last year. There was approximately $43 million in sold volume in the 2nd quarter, which is nearly $10.5 million more than last year, a 32% surge.

Fredericksburg: There was approximately $33 million in sold volume in the City during the 2nd quarter, which is about $1.1 million less than a year ago, representing a 3% decline. Except for the 1st quarter of this year the sold volume has been trending down in the city since the beginning of 2018.

King George County: After strong gains the past two quarters, the sold dollar volume moderated in the County. There was approximately $33.5 million in sold volume in the 2nd quarter, down 4% from last year, a $1.4 million decline.

Orange County: After falling for five straight quarters, the sold dollar volume in the County surged this quarter. There was $57 million in sold volume in the 2nd quarter, up $7.5 million from last year, a 15% jump.

Spotsylvania County: There was about $226 million in sold volume in the County during the 2nd quarter, which is $9.8 million more than a year ago, representing a 5% increase.

Stafford County: At $309 million, the sold dollar volume for the County rose 6%, a gain of $18.7 million. Other than a drop last quarter, and at the end of 2017, the sold volume has been climbing in Stafford County for more than four years.

Westmoreland County: At $21 million the sold volume in the County declined $1.2 million from last year, a 6% drop. Prior to the decrease, the sold volume was rising at a double-digit pace for two quarters in a row.

Local Snapshot – Sold Dollar Volume

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Figure 122nd Quarter Sold Dollar Volume, FAAR Jurisdictions

2018 and 2019

2018 - Q2

2019 - Q2

Source: Virginia REALTORS®, data accessed July 17, 2019

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Days on Market

It’s taking longer to sell homes on average in the FAAR area. At 53 days, the average days on market for the region is up 10 days from the 2nd quarter of last year. This metric has been tending up in the region in recent quarters after declining steadily for more than two years. Except for Westmoreland County, all jurisdictions in the FAAR footprint had a higher average days on market this quarter compared to a year ago. The average days on market in the region’s largest local market, Stafford County, increased by 16 days in the 2nd quarter from last year, the biggest jump of this metric in more than four years in the County.

As the average days on market trends up, it could signal cooling demand in some local areas. While there were more home sales in the region this quarter, it was a relatively light increase following several quarters of flat and declining sales activity. The rising days on market could also indicate a mismatch in the types and price points of homes listed on the market and the homes sought by buyers that are active in the market. This can become more likely as the supply of active listings continues to shrink in many of the region’s local markets.

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Figure 132nd Quarter Average Days on Market, FAAR

2015-2019

Source: Virginia REALTORS®, data accessed July 17, 2019

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Caroline County: Homes sold during the 2nd quarter were on the market an average of 52 days in the County, which is slightly higher than a year ago (+3 days). The average days on market has been trending up in the County since the end of last year.

Fredericksburg: The average days on market in the City rose by more than 3 weeks (+23 days) in the 2nd quarter. This is the biggest jump for this metric in two years.

King George County: At 54 days, the average days on market in King George County during the 2nd quarter inched up 1 day form last year.

Orange County: The average days on market has been trending up in Orange County for 3 quarters in a row after falling sharply for several years. At 71 days, the average days on market in the 2nd quarter was 15 days higher than last year.

Spotsylvania County: Following a long period of decline, the average days on market has been rising in the County in recent quarters. In the 2nd quarter the average day on market rose to 46 days, 10 days higher than last year.

Stafford County: Similar to neighboring Spotsylvania County, the average days on market in Stafford County has been trending up recently after consistent declines for several years. At 49 days, the 2nd quarter average days on market increased by 16 days from a year ago.

Westmoreland County: Homes are selling faster in the County than they were a year ago. The average days on market in the 2nd quarter was 106 days, which is more than a month faster (-39 days) than last year. This is the largest decline since the 1st quarter of 2018.

Local Snapshot – Average Days on Market

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Figure 142nd Quarter Average Days on Market, FAAR Jurisdictions

2018 and 2019

2018 - Q2

2019 - Q2

Source: Virginia REALTORS®, data accessed July 17, 2019

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Inventory

The supply of active listings continues to shrink in the FAAR region. There were 2,256 active listings at the end of the 2nd quarter, which is a 13% drop from last year, a reduction of 351 listings. The inventory on the market has been trending down now for more than three years. This quarter represents the steepest decline in active listings since the spring of 2016. There are fewer active listings in most jurisdictions in the region this quarter, led by Orange County with a 24% reduction, or 80 fewer listings than a year ago. The City of Fredericksburg is the only jurisdiction in the region to have an upward trend in the supply of active listings in recent quarters. There was approximately 3.7 month of supply active on the market at the end of the 2nd quarter, which is about a half month less than a year ago.

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Figure 16End of 2nd Quarter Months Supply, FAAR

2015-2019

Source: Virginia REALTORS®, data accessed July 17, 2019

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Caroline County: The supply of active listings in the County continues to shrink. There were 134 active listings on the market at the end of the 2nd quarter, which is 71 fewer than last year, representing a 35% reduction.

Fredericksburg: The City was one of only two jurisdictions in the FAAR footprint to have more active listings than last year. There were 110 active listings on the market at the end of the 2nd quarter, which is 9 more than a year ago, a 9% expansion of the supply.

King George County: Along with Fredericksburg, King George County was one of the jurisdictions with an increasing supply of active listings. There were 155 active listings on the market at the end of the 2nd quarter, 11 more than last year, representing an 8% gain.

Orange County: There were 252 active listings in the County at the end of the 2nd quarter, down 24% from last year, a reduction of 80 listings. The supply of listings has been declining for several years and this is the second largest drop during that timeframe.

Spotsylvania County: The inventory of active listings continues to shrink in the County. There were 637 active listings on the market at the end of the 2nd quarter, which is 77 fewer than a year ago, down 11%.

Stafford County: There were 733 active listings in Stafford County at the end of the 2nd quarter, which is down 9% from last year, which is 76 fewer listings. The supply of active listings had been trending up in recent quarters prior to this drop.

Westmoreland County: The inventory of active listings remains in a downward pattern in the County. There were 235 active listings at the end of the 2nd quarter, down 22% from last year, a reduction of 67 listings.

Local Snapshot – Active Listings

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Figure 16End of 2nd Quarter Active Listings, FAAR Jurisdictions

2018 and 2019

2018 - Q2

2019 - Q2

Source: Virginia REALTORS®, data accessed July 17, 2019

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