realtorsinvirginia

The Housing Market Shift

Christy Crouch|June 22, 2022

We've been seeing signs of the shift since the beginning of the year and now we're experiencing the actual shift.  For the last several years we've been in a very upward trending market with historically low inventory and skyrocketing prices on homes.  Many ask are we headed toward a repeat of 2008 and the answer is no.  At least short of something very unexpected coming our way.  What we are headed for is seeing more inventory for buyers to choose from finally!  For months we have been in the midst of a very strong seller's market with more Realtors in market than homes to sell.  Don't get too excited though we aren't expecting an oversupply of homes to come by any means.  We are just expecting to see more homes come on the market which we are already seeing in Roanoke, Virginia and our surrounding locations.

Every day I pull the report from our local MLS that reveals new homes for sale, homes that have sold, and homes that have adjusted their prices.  Recently in our local market we were lucky to see more than 450 homes for sale at a time.  Today there are 642 homes for sale in Roanoke MLS which covers Roanoke County, Roanoke City, Salem, Botetourt, Franklin County, Craig County, Smith Mountain Lake, and some portions of Floyd and Montgomery County.  In the New River Valley MLS which covers Christiansburg, Blacksburg, Floyd, and Montgomery counties there are 290.  

The average sales price of homes in Roanoke and surrounding locations is $319,196, the average days on market for a home is 38, the average list to sales price ratio is 100.9%.   In the NRV the average sales price is $279,106, the average days on market is 50, and the average list to sales price ratio is 100.23%.  Coming through the first half of the year you can see our housing statistics are very strong.  As we head into the second half of the year we will see this continue to soften.  

What's this all mean for local home buyers and home sellers?  Well for sellers it will be an adjustment for sure as seller's have ridden the wave of an absolutely unprecedented seller's market for months now.  Sellers will now need to begin looking at the price they set as buyers will slowly start having a little more power in the market.  Sellers will also need to put more emphasis on the condition of the home and how they present it.  In recent months literally we can throw a home in the MLS and inevitably it sells.  Which leads to the next big factor and that's the Realtor a seller chooses to list their home and represent them.  With the recent market any agent that has a license could sell a home because it didn't take any effort.  With the changing market Realtors will need to know the market trends, know what's on the horizon, and be able to properly educate sellers on the right price, what to expect, and actually assist them in the changing trends.  For instance, recently many sellers haven't had to worry about home inspection repairs, paying closing costs, appraisal repairs, etc because for a moment a lot of this was simply non existent in the home sales process.  This will all be changing as we move forward.  With it being most's largest single investment you certainly owe it to yourself to have a full time experienced professional on your side.  With the cost to hire a Realtor doesn't it make sense to do your due diligence and get the best agent for the job being careful not to choose an agent that has only experienced the recent market conditions?  I'd say without a doubt it does.

On the home buying side buyer can expect to breathe a little in the coming months.  Again, we will start to see more homes coming for sale finally giving buyers more of a choice.  This will take some of the pressure off of buyers feeling the need to make hasty decisions in fear of losing the home of their dreams.  Hopefully rather than having to make decision within days or even hours of a home being listed for sale buyers will have days or weeks to make the right decision as we move into the second half of the year.  As a top agent we study homes and prices every day and we are already starting to see longer days on market and even price reductions as home begin to sit on the market for more than a week.  In fact we had two listings recently in SW Roanoke County that just a month ago would likely have had competing offers within 24 hours.  One was on the market 13 days before selling with only one offer.  The other is still for sale after 14 days.  While this may seem like a very short amount of time it has certainly not been the case in the last few years.

Interest rates are rising and this means unfortunately for many buyers they may have less buying power.  In fact we are advising our home buyers to revisit the pre approval with their lenders even if they were approved within the last few weeks. With rates jumping from day to day you could end up qualifying for less or even not qualifying at all if your debt to income ratio is too tight or rates rise too rapidly.  You may want to consider locking in your rate with your lender.  Most rates can be good for 180 days.  This protects you from the interest rate increase.  I believe we will being to see adjustable rate mortgages again and possibly buy-downs.  Both allow buyers to buy a bit more while maintaining lower interest rates.  Be sure to talk to your lender about all the programs, options, and closing costs involved with buying whether you're a first time buyer, second, or last there are always options.  It's a good idea to determine your goals up front knowing how much you are comfortable spending per month, how much you want to put as a downpayment, and how many years you plan on staying in the home.

Stay tuned for more insight on the housing market as I begin to write our own blog posts moving forward to bring more local education, contribution, and updates to our local community.

 

 

 

 

 

 

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