Richmond Times Dispatch: Virginia housing market improving, Fed survey shows

20150707_BIZ_MARKp01 The Associated Press
Posted: Monday, July 6, 2015 10:30 pm
By CAROL HAZARD Richmond Times-Dispatch

The housing market in Virginia was noticeably better in the first part of the year than the same period a year ago, according to results of an annual survey released Monday by the Federal Reserve Bank of Richmond.

First-time homebuyers boosted the Virginia housing market, representing 45 percent of clients for the 354 members of the Virginia Association of Realtors who responded to an online survey between May 4 and May 15.

Nationally, first-time homebuyers represented 30 percent of all buyers of existing homes in March, 29 percent in February and 28 percent in January, according to the National Association of Realtors. It rose to 32 percent in May, the latest national figure available, which matched the highest share since September 2012.

A year ago, first-time buyers represented 27 percent of all buyers.

The survey featured 16 questions designed to gauge the state of the housing market in the first quarter compared with the same time period in 2014.

“We saw a noticeable improvement in the residential housing sector in the commonwealth this year,” said Andy Bauer, senior regional economist for the Richmond Fed.

“More than 50 percent of participants reported improved conditions, and 44 percent characterized market activity as strong or somewhat strong.”

In 2014, the least positive of a four-year survey period, 42 percent of those surveyed reported conditions as “significantly” or “slightly” worse than the previous year.

Highlights of the survey show:

  • 51 percent reported that median sales prices were slightly or significantly higher, up from 41 percent in 2014;
  • 59 percent said appraisals were “about right”;
  • 37 percent said appraisals were too low, down from 40 percent in 2014, 53 percent in 2013 and 58 percent in 2012; and
  • 70 percent expected home sales to increase, while just 9 percent expected home prices to decrease.

Severe winter weather during the first quarter hurt the housing market, with 47 percent of respondents indicating sales were “somewhat” negatively impacted by the weather, while 20 percent reported the weather “greatly” affected sales.

Customer traffic increased “markedly” in most regions, including central Virginia, and the price range of homes purchased varied, according to survey results.

The Northern region was the most expensive since nearly 50 percent of respondents indicated that the typical range for their clients was greater than $400,000. The Central and Hampton Roads regions were the next expensive with more than 60 percent of sales in the $200,000 to $400,000 range.

On the other end of the spectrum, more than 80 percent of respondents in the Southwest and Southside regions indicated that the typical price range was less than $200,000.

Overall, respondents were positive about the rest of 2015, with 56 percent indicating they considered the housing market “significantly” or “slightly” better now than earlier in the year, according to the survey results. In central Virginia, 61 percent of respondents said the market was “significantly” or “slightly” better.

“There appears to be a good deal of optimism regarding the Virginia housing market,” Bauer said.

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