News

The February real estate market continued the trend of increasing prices and falling demand, but also showed some promising signs for the those waiting for more inventory with a slight increase in active listings and a large increase in new listings compared to last year.  Median price was up nearly 4% year-over-year coming in at $435,000 this February compared to $419,900 last year.  Total sold volume remained static from last February coming in at approximately $157 million, a scant 1% decrease from 2023 numbers.  Units sold fell by 6% year-over-year compared to last February with 335 homes selling last month compared to 358 in 2023. 

“I find the present condition of our real estate market to be quite promising,” states FAAR Board of Director Tamar Myers-Moffatt.  “A growing number of homeowners appear ready to place their properties on the market, and there is a noticeable increase in active listings becoming available.  The open houses that I have hosted have steady streams of buyers who seem prepared to proceed. My buyers are encouraged by the quality of homes available but are still faced with multiple offer scenarios.”

The real estate market is highly sensitive to even small fluctuations in mortgage rates and the dip in rates that started the year turned into many more buyers coming out.  That increased competition was reflected in homes spending less time on the market than last February.  Days on market, the time it takes from when a listing enters the market until it receives a ratified contract and is removed from active status on the multiple listing service decreased 10% going from 40 days last February to 36 this year.

Active listings, new listings, and new pending contracts all increased for the first time since 2022, but available homes remain in chronically short supply and well-below pre-2020 levels.  Active listings increased nearly 2%, with 661 homes on the market compared to 649 homes closing out last February.  For comparison, there were 1,140 properties on the market at the end of February 2020 so the market is currently running at half of what was typical before the pandemic.  While the most recent active listings increase is very small, there was encouraging news in new listings.  The market saw a 32% increase of homes coming on the market this February with only 393 homes listed for sale at the end of February in 2023 compared to 520 new home listings this year.  New pending contracts were up 8% with 468 pending transactions this February compared to 433 last year.

Myers-Moffatt continues, “All of my current buyers have a home to sell, so finding that next property is a point of concern. Leveraging post-occupancy addendums certainly helps, however many of the offers we receive also have home sale contingencies.  This puts the seller in an especially vulnerable position when formulating their exit strategy for a new property.  I think we can expect to see this trend continue through the spring and summer months.”  

The local housing market started the year out with a bang, racking up year-over-year increases in units sold and total dollar volume for the first time in nearly two years.  January closed with approximately $153 million in total sales volume, an almost 8% increase since last January.  Sold volume was fueled by a nearly 7% year-over-year increase in units sold, coming in at 324 homes sold this January compared to 303 last year.  This is the first time the market has seen an annual increase in units sold since April of 2022.  Median price increased a modest 3% coming in at $432,000 this January compared to $419,900 last year. 

“Our region is still experiencing limited inventory, and the tension between low buyer demand and even lower seller activity is keeping upward pressure on home prices,” comments FAAR Board of Director Meghan Kala.  “Median home prices in every locale continue to rise and our fringe areas are no exception. Buyers should look at these year-over-year prices as an indication that ‘the bubble isn’t going to burst’.”

Days on market, the time it takes from when a listing enters the market until it receives a ratified contract and is removed from active status on the multiple listing service stayed nearly static from last year, going from 38 days last January to 39 days this year.  Nearly a third of homes on the market sold in 10 days or less. 

Active listings, new listings, and new pending transactions were all down in January with just 634 homes on the market at the close of the month, the lowest since February of 2022.  New pending sales were down more than 17% with 383 homes under contract compared to 464 last January.  New listings stayed static from last year continuing the trend of diminishing new product coming onto the market.  The region saw 476 homes listed last January compared to 467 this year, a nearly 2% decline.

Sellers continue to sit on the sidelines to see what mortgage interest rates are going to do.  Kala comments, “As growth and development in the Fredericksburg region continues, the parallel that has consistently remained the same is the immediate need for homes. Sellers could be sitting on a mountain of equity and are ready to downsize, but they are uncertain if the time is right to list. The question they may ask themselves is – where will I go? As a result, we may see an increase of home sale contingencies in transactions. We are still experiencing multiple offer scenarios, which should encourage sellers who are getting ready to put their home on the market. Many buyers have been enjoying the security of contingencies in the slower market, but those days may be numbered if rates decline. Attainability, especially for first time home buyers, could prove to be challenging if they continue to wait.”