Real Estate: Greater Piedmont Area Real Estate â?? Q4 2015 Market Trends Report

The following analysis of the Greater Piedmont Virginia area housing market has been prepared for the Greater Piedmont Area Association of REALTORS® (GPAAR) based on analysis of MRIS multiple listing data by RealEstate Business Intelligence, LLC (RBI).

Overview
During the fourth quarter of 2014, the median sales price for all property types sold in the Greater Piedmont Area real estate market saw a 4.6 percent year-over-year increase, rising to $271,000 from the Q4 2014 level of $259,000. Total sales dollar volume for all property types combined in Q4 was $191.9 million. This level was an 8.9 percent increase from the $176.3 million sold in Q4 2014. Year-end total sales volume for all of 2015 showed an increase of 9.6 percent over 2014. Total sales during 2015 reached their highest level in eight years with a total of $770.0 million compared to $702.8 million in 2014.

The 771 new listings in the fourth quarter showed an increase of 12.1 percent over Q4 2014 and exceeded both the five-year and 10-year average Q4 levels of 672 and 739 new listings respectively. In the fourth quarter, buyers took advantage of the increased inventory and placed 582 properties under contract. This level was 11.1 percent higher than a year ago and the number of contracts ratified exceeded both the five-year Q4 average (526 contracts) and 10-year Q4 average (450 contracts) levels. Again this year, buyers were motivated to act more quickly than is usual for the fourth quarter â?? typically the slowest of the year. The median days-on-market (DOM), the number of days from when a listing enters the market until it receives a fully ratified purchase offer, decreased 6.5 percent from last year. The Q4 2015 level of 58 days beat last yearâ??s Q4 median level (62 days) and beat the 10-year Q4 median level (63 days).

For the entire year, new listings increased 4.1 percent (4,221) above their 2014 total (4,056). Continued low interest rates in 2015 and higher inventory levels continued to drive sales and new contracts during the fourth quarter and throughout the year. The 2015 total sold units of 2,364 reflected a year-over-year increase of 8.7 percent, outperforming both the five-year average (2,116 sales) and the 10-year average (1,991 sales). While mortgage interest rates are generally expected to slowly increase throughout 2016, the short-term expectation is for flat rates for the next several months. Combined with greater inventory, we expect the pace of sales and new contracts to pick up in the Greater Piedmont area.

Key Trends
Pricing. Four of the five counties in the Greater Piedmont area had median sale price increases and only one declined. Madison and Rappahannock Counties tied for the highest year-over-year increases. Madison Countyâ??s median sale price ($202,500) was a 15.4 percent increase from the Q4 2014 level of $175,500. Rappahannock Countyâ??s median sale price ($329,000) was also a 15.4 percent increase over the Q4 2014 level of $285,000. Fauquier County had a year-over-year increase of 6.1 percent with a Q4 median sale price of $350,000 compared to last yearâ??s level of $330,000. The Culpeper County median sale price for Q4 2015 was $250,995 representing an increase of 2.5 percent from last yearâ??s level of $244,900. Only Orange County saw a Q4 year-over-year decrease of 2.2 percent with a $200,000 median sale price, down from the Q4 2014 level of $204,500.

Sales. The 556 total sales in Q4 2015 were the highest Q4 level since 2005 (626 sales). Three jurisdictions showed year-over-year increases. Rappahannock County had the largest increase at 80.0 percent with 27 sales in Q4 2015 and 15 sales in Q4 2014. Orange County was next with an 18.8 percent increase over last year with 139 sales in Q4 2015. Fauquier County was almost flat with 219 sales this year and 216 sales last year, a 1.4 percent increase. Culpeper County showed a 2.0 percent decrease with 150 sales in Q4 2015 and 153 sales in Q4 2014. Madison County had a 19.2 percent year-over-year decrease with 21 sales this year and 26 sales in Q4 2014.

Sold to List Price Ratio. The fourth quarterâ??s average sale price to original list price ratio continued to outpace both the five-year and 10-year average rates. Currently at 93.5 percent (or a 6.5 percent seller discount) this value is higher than both the five-year (92.9 percent) and 10-year (91.7 percent) average Q4 values. The upcoming Q1 average five-year rate has been 91.4 percent. Based on five-year and 10-year trends, expect the seller discount to increase by 0.25 percent to 0.75 percent in Q1 2016.

Inventory. All five counties in the Greater Piedmont Area showed strong year-over-year increases in new listing activity. Orange County had the largest percentage year-over-year gain with 13.3 percent and 905 new listings in 2015, up from 799 in 2014. Fauquier County had a 3.8 percent gain over 2014 with 1,784 new listings compared to 1,718 new listings a year ago. Culpeper County barely beat its 2014 level with 1,112 new listings this year, a 0.7 percent gain over last yearâ??s level of 1,104 new listings. Madison County was fourth with a 1.7 percent year-over-year decline with 233 new listings compared to 237 in 2014. Rappahannock County had a decrease of 5.6 percent with 187 new listings over last yearâ??s level of 198 new listings.