The housing market in the 16 localities of the Central Virginia region surged in the second quarter, marking the strongest start to a year since 2011, according to a report released today by the Central Virginia Regional Multiple Listing Service.
In just the Richmond area — Chesterfield, Hanover and Henrico counties and Richmond — the number of sales rose to 4,187, a 15 percent increase compared with the second quarter of 2014.
Chesterfield led the area with 1,593 home sales, up 18 percent from the same period a year ago.
The greatest percentage increase in home sales was in Hanover, in which 480 homes were sold, up 23 percent from the second quarter of 2014.
Prices continued to rise as well. The median price was $225,926 for the second quarter in the Richmond area, up 4 percent from the same period a year ago.
“We expected a strong second quarter, and it was even a little stronger than anticipated,” said Laura Lafayette, chief executive officer of the Richmond Association of Realtors. “The economy overall has improved. When that improves, it bodes well for the housing market.”
All but one of the 16 jurisdictions in the larger region showed sales growth, which has not happened since before the recession, the report showed. The Central Virginia region includes the Richmond area, the Tri-Cities and nine surrounding counties.
Charles City County had a 31 percent decrease in home sales.
The median sales price for the region was $223,530, up 5 percent from the same period a year ago. Only Prince George County and Richmond saw sales prices decrease compared to last year.
Goochland County again led the region in median sales price, at $417,500, up 20 percent from the second quarter 2014. Petersburg recorded the lowest median sales price, $67,000. However, Petersburg also showed the highest price growth compared to last year, at 33 percent.
Increases in sales were tempered by another quarter of decreasing inventory. Active listings were down 9 percent in the region from the second quarter last year, to 5,663.
Only Louisa and Caroline counties had an increase in active listings, according to the report. Richmond’s number of active listings dropped 26 percent from a year ago, the sharpest drop in almost three years.
Growth in pending sales could have contributed to this decline, as homes are taken off active listings. If the trend continues and buyer demand remains strong, the report said, it is likely that sales prices will rise given the historically low supply of homes available.
Demand could drop later this year if the Federal Reserve increases interest rates this fall.
“The reality is, to borrow money today is cheaper than it will be probably four or five months from now,” Lafayette said. “But if the rates go up slowly, I don’t think you’ll see any dramatic consequences.”
Though home prices in the 16-jurisdiction region still have not approached the peak of $274,614 set in 2007, the market has turned the corner from recovery and is now flourishing, Lafayette said.
“We began to see the production turn from ‘12 to ‘13, and we’ve seen a steady increase in 2013, 2014, and we’re certainly on pace to outperform in 2015.”
For perspective, a total of 20,057 houses were sold in the region at the peak of the sales market in 2005, according to association data. By comparison, 13,646 houses were sold last year — the fourth consecutive annual increase.
Copyright Richmond Times-Dispatch. Used by Permission.