Since last summer, Virginia’s housing market has been characterized by shrinking supply, bidding wars, and double-digit price growth. Almost every market across the state is very competitive, but the supply and demand imbalance in bigger in some places. Where are buyers snapping up properties much faster than they come on the market?
Southside Virginia’s Market is the Most Turbulent
One measure of the frenetic pace of the housing market is the ratio of monthly pending sales to monthly new listings. There are more than 20 counties and independent cities in Virginia where the April 2021 pending sales-to-new listings ratio was greater than 100. A ratio over 100 indicates that the number of new contracts was greater than the number of new listings coming onto the market. These are the markets where inventory is being drawn down fastest.
In April, Southside Virginia has some of the most exuberant housing markets. For example, in Henry County, there were 82 pending sales in April 2021, while there were 73 new listings brought to market during the month. The pending sales-to-new listings ratio for Henry County was 112%. In Patrick County, the ratio was 138%, with 40 pending sales and just 29 newly listed homes. This is a much different market than in was two years ago, in April 2019, when the ratios for Henry and Patrick counties were 66% and 48%, respectively, indicative of a much calmer market. In much of the Southside Virginia region, the number of new contracts significantly outpaced new listings this spring.
The Markets with the Most Breathing Room are in Southwest Virginia and the Northern Neck
There are 17 counties and independent cities in Virginia where the pending sales-to-new listings ratio was below 50 in April. A ratio below 50 indicates that the number of homes being listed is much greater than the number going under contract. In these more restrained markets, buyers have more options and homes take longer to sell.
In Southwest Virginia, there were 47 new listings in April 2021 in Washington County with just 11 homes going under contract, for a pending sales-to-new listings ratio of 23%. In Wythe County, the ratio in April was 37%, with just 11 pending sales and 30 new listings.
There are similar markets in the Northern Neck, where the April 2021 pending sales-to-new listings ratio was 48% in Westmoreland County and 24% in Northumberland County. This is a different pattern than in April 2019 when the ratios were around 100% for both of these Northern Neck communities.
Making Sense of Changing Markets
Tracking newly listed properties and the number of homes going under contract is a good way for REALTORS® to gauge the velocity of local markets and to help predict where the market might be heading. Markets where the ratio of pending sales to new listings is above 100 are where homes are selling increasingly fast and prices are rising significantly. In Patrick County, homes are selling two months faster, on average, compared to last year at this time, and prices in the county are up by 26%. By comparison, in Northumberland County, homes have been selling faster this year compared to last year, but the median home price in the County is up more modestly (+5.8%).
In this changing market, it is more important than ever to stay on top of local market conditions. Virginia REALTORS® and local REALTOR® associations are a great source of housing market data and analysis.
Click here to send any comments or questions about this piece to Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.