This year the housing market was different than what was
forecasted. A review of Rein’s monthly market reports show that inventory has
steadily declined since the beginning of the year which started at the lowest
point since 2013. Sales have remained strong throughout the year with the best
months being February and May while July had a large drop year-over-year. The
drop in July was not in Hampton Roads alone, in fact the Hampton Roads market
has followed the national market with low inventory and low sales in July. Redfin
is attributing the July sales to a month of fewer business days due to five
full weekends and a national holiday. New construction has continued to be
strong since May with double digit growth and the median sale price has
remained relatively stable since April which had a 4% increase year-to-year.
The mild winter may have helped the spring market and May had the lowest state
unemployment rate since 2008.
Although the Federal Reserve threatened to raise mortgage
rates this year, we have actually seen a decline of approximately 0.5% since
January with rates below 4%. Many of the foreign economies are experiencing
slow growth which is keeping our rates low. If China, Japan, and Europe’s
economies turnaround, our rates may rise a noticeable level but until that
happens, economists don’t expect to see a significant change. We may continue
to see rates near 4% for a while.
While the market has remained strong and rates low, the
homebuyer market has seen a change in homebuyers. According to NAR, in this
past year, 17% of homebuyers were single women, which was twice the rate of
single men. Many female buyers of single family homes are in their 40’s or
older and are divorced or widowed. The report also showed that single
millennial women are buying condominiums.
This July REIN implemented single sign-on technology to
allow easy access to all the necessary transaction tools. You no longer have to
recall numerous websites and passwords to process a single transaction. This
should speed up and simplify the transaction process. In October zipLogix
Products were replaced by Instanet Solutions to also simplify the transaction
Matrix is now the sole MLS system. This decision was made by
the product vendor who is no longer going to support the technology behind
Fusion. The REIN staff was busy working with the vendor to create reports and
functional processes to make the transition seamless while offering all the
tools that we need to run our businesses. Change can be painful for some, but
in a world of changing technology and data access it is important that we stay
up-to-date to effectively service our clients.
Since this year’s market has been so strong it is believed
that it will remain strong into next year. Rates may increase to 4.5% but this
should not have an impact on the market. It will still be difficult for first
time home buyers to qualify for a mortgage. If inventories increase,
appreciation should slow down and keep prices at an affordable level, allowing
many first time home buyers to qualify for a loan.