– Mid-2017 Update

millenial home buyer

We are more than half way through the year and if the trend continues,  2017 will be another year that out paces the year before.  The number of sales has increased another 3.9% as has the median sales price (up 4.3%) throughout most of Charlottesville and the Central Virginia Area.    Days on market decreased as well to 13 days which is 8 days shorter than the same time in 2016.

Here are a few stats of interest to note:

New construction once again played a bigger role in the number of sales. 5% of homes sold during the 1st 6 months were new compared to 11.4% during the same time period in 2016.

The upper price ranges have begun to sell in a positive fashion. In 2016, 15% were above $500,000 and 2% of the sales were above $1,000,000.  Through June of 2017, 17% were above $500,000 and 2.5% were above $1,000,000

Recently released National Association of Realtor 2016 stats show that the younger generations are entering the home buying market- 30% of the buyers were between 52-70, 34% 36 and under, and 28% were buyers between 37-51:

  1. Of those who purchased in 2016, the desire to buy their own home continued to be the #1 reason(50%) people buy
  2. For those surveyed, Inventory, Unrealistic expectations, and lack of affordability are the three main reasons people didn’t buy a home in 2016
  3. 88% of the buyers said they would use their agent again or recommend them to a friend. Why, because they helped them understand the process, pointed out important facts about the home, and negotiated a better price and terms on the purchase.
  4. Of no surprise-Online searches and a real estate agent were the top two ways buyers found their home 95% vs 92% with 58% finding their home with a mobile app. More than 53% said their first step in looking for a home was to go online.
  5. More and more people are starting their search on the internet. Twice as many buyers 56% found their home online vs 28% through their real estate agent.

There are things to watch that could negatively impact what has been a strong recovery in the housing market.

First, the Charlottesville Area Association of Realtor mid-year report http://wina.com/podcasts/2nd-quarter-caar-market-report-2/ showed the lack of inventory mentioned before and that pending sales (properties recently under contract) were down.  If that trend continues, we could see the number of homes actually sold dropping when we look at the 3rd quarter numbers.

Secondly, interest rates seem to be stable but if they started to go up, that could cause buyers to not purchase.  The conversation about privatizing FNMA and Freddie Mac will likely impact interest rates depending on how the government chooses to handle these secondary market entities.  For more information on this issue, please listen to this podcast with Mortgage Bankers Assoc President and CEO David Stevens. http://wina.com/podcasts/issues-impacting-real-estate/

Finally, the increase in new construction could negatively impact sellers who are trying to sell their existing homes especially in the higher price ranges.

  1. As the end of summer looms with fall around the corner, look for increased activity after Labor Day as sellers will try to take advantage of the 10 weeks before Thanksgiving and the Christmas season settle things down again. So take the time now to get online to see what is on the market and when you are ready to start looking, check out roywheeler.com to find a Realtor you can trust who will serve you well in the areas NAR confirmed in their above mentioned survey;  Help you understand the process, point out the important facts about the home, and negotiate a better price and terms on the purchase.

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