August sales soar on year, rebound from restrained July
According to the August 2016 Home Sales Report released by the Virginia Association of REALTORS® (VAR), residential real estate sales have rebounded strongly from a lagging July and are markedly higher than at this time last year. Year-to-date measures continue to outpace prior years and suggest sustained market strengthening. Volume through the end of August 2016 exceeded $25.941 billion, a gain of 6.8 percent from last year’s accumulation of $24.294 billion.
“Particularly strong sales in Virginia’s densest regions fostered an August boom,” stated 2016 VAR President Bill White. “We are beginning to overcome inventory constraints that have been a challenge through summer months. With financing still available at historically low interest rates, buyers are motivated to enter the market and are now able to take advantage of greater inventory.”
Year-over-year, the number of transactions jumped by 12.5 percent, from 10,204 sales to 11,482. Atypical of the months following the summer peak, August sales slightly exceeded July sales by 0.6 percent. Historically, sales decline from June through December.
Volume rose on the year from $3.303 billion last August to $3.793 this year, a significant increase of 14.8 percent. The boost in volume is accounted for by a steadily rising median price and higher than average sales growth in Virginia’s densest residential regions. Because Northern Virginia, Hampton Roads, and Central Virginia account for the largest percentage of overall sales, aggregate performance is magnified by the trends in these regions.
Statewide median sales price for August was $272,500, 1.7 percent higher than the median price last August ($268,000). In accordance with typical seasonality, the August median price declined from July ($278,000), tapering from the June peak. The seasonal median price decline between July and August this year was less pronounced than last year (2 percent in 2016 versus 2.6 percent in 2015).
The average number of days on the market declined year-over-year by 13 percent, from 69 to 60. Further illustrating August strength, there was no change in average length of time on the market from July. Historically, days on the market increase every month June through December as summer activity slows into the third and fourth quarters.
The average 30-year fixed mortgage interest rate remained at a static low in August at 3.44 percent. The continued access to enticing rates, along with increased inventory in dense markets, propelled buyer activity and contributed to market performance. Virginia unemployment rose to a seasonally-adjusted rate of 3.9 percent in August, up 0.2 percent from the rate reported for July.
The Virginia Home Sales Report is published by the Virginia Association of REALTORS®. Click here to view the full August 2016 Home Sales Report. Current and past reports are available to members, media, and real estate related-industries through the organization’s website.
