With 2007 Dispensed with, VA Realtors Look Forward

Arlington Sun Gazette, February 17, 2008
By SCOTT McCAFFREY

Home sales statewide in 2007 were down 11.8 percent from a year before, with average sales prices down slightly, but the statewide market is likely to fare better in the coming year than the nation as a whole.

That last bit of analysis is from Lisa Fowler, director of the Office of Housing Policy Research of the George Mason University School of Public Policy, who analyzed the current state of Virginia's housing market on behalf of the Virginia Association of Realtors.

“Overall, Virginia faces stronger market fundamentals than many other states, with a relatively strong economy and a housing market with a relatively small share of investors,” Fowler said in the analysis.

She anticipates increases in the demand for housing in the parts of the Old Dominion that have strong job growth and low unemployment rates, areas that include Northern Virginia and most of the commonwealth's other metropolitan areas.

“In some desirable neighborhoods - that is, places close to jobs, amenities and transportation routes - the recovery is already happening,” Fowler says. Looking ahead gives the state's Realtor community the chance to put an ugly 2007 into the rear-view mirror.

Homes sales statewide totaled 95,413, down 11.8 percent from the 108,196 sales recorded in 2006. And, in general, sales in the second half of the year showed more dramatic drops than those in the first half.

(The year-end sales figures for 2006 and 2007 do not include figures from Charlottesville, whose Realtor association does not report them to the Virginia
Association of Realtors.)

In all, 21 of 22 geographic areas across the commonwealth reported fewer sales in 2007 than 2006, with the Southwest Virginia area showing a 1.4-percent increase. Nineteen regions reported double-digit declines from a year before, including seven areas with declines of more than 20 percent.

In December, sales across the commonwealth totaled 6,006, down 25.6 percent from the 8,077 sales recorded a year before (not including Charlottesville sales).

Homes sales across the local region all were in negative territory:

* Sales across the inner suburbs of Arlington, Alexandria and Fairfax County declined 29.9 percent in December, to 1,199.

* Sales in Loudoun County declined 30.5 percent, to 328.

* Sales in Prince William County declined 28.4 percent, to 273.

Statewide, the average sales price of $276,847 in December was up 0.7 percent from a year before. The average sales price in the inner suburbs of Northern Virginia in December rose 1.4 percent, to $536,710, while prices in the outer suburbs declined.

Statewide, it took an average of 138 days for a home that sold in November to go from listing to ratified contract. That compares to the long-term, historic average of 90 days.

Locally, the average number of days on the market was 103 in the inner suburbs, 104 in Loudoun and 143 in Prince William. For the full year, average sales prices in 2007 were down 3.1 percent, compared to a 30-year average annual increase of 6.4 percent. The year-long average number of days on the market was 88 days.

Fowler says the housing market is “inextricably linked” to the health of the economy, but, over the past decade, that linkage has been skewed:

* During the boom market of 2000-06, home prices and sales increased at a level much higher than would be expected, given fundamental laws of supply and demand.

* Over the past year, the reverse occurred: housing activity was below what would be expected in areas that continued to have strong economic health.

“In order for the housing market to return to a more normal state, there will be periods of slower-than-average growth to follow five years of rapid growth,”

Fowler said. “We are currently in that period of slower growth.”