Key Takeaways

• There was a surge in closed sales activity in October in Virginia’s housing market. The influx of sales was driven by a jump in pending sales (new contracts) in September when mortgage rates were falling into the low 6% range. Statewide there were 9,408 closed sales in October, 968 more than a year ago, a 12.5% increase.
• Sales prices are still rising in most local housing markets in the commonwealth. The statewide median sales price in October was $415,000, climbing $25,000 from this time last year, a 6.4% increase. Pent-up demand and tight (but improving) inventory conditions are keeping upward pressure on price points in the market.
• The influx of closed sales and higher prices drove up the sold dollar volume in Virginia this month. There was about $4.54 billion of sold volume statewide in October, a 21.6% gain from last year, which is an additional $807 million of volume.
• There were 20,042 active listings on the market throughout Virginia at the end of October, 16% more than a year ago, which is about 2,700 more listings. This is the first time the overall supply of active listings has exceeded 20,000 statewide in about four years, signaling that more sellers slowly entering the market.

Outlook

It was a busy October in Virginia’s housing market, but will it continue? Here are some key things to watch as the autumn market progresses:

• We are in a highly rate-sensitive market on both sides of the table given the higher price points and much higher mortgage rates than a few years ago. Climbing mortgage rates will likely deter activity, and falling rates will spur more activity. Mortgage rates have been trending up since September and this could keep some sellers and buyers on the sidelines in the coming month or two until the upward trend pivots downward.
• The supply in Virginia’s housing market is still tight but there is mounting evidence that conditions are stabilizing. There was 2.4 months of supply in October statewide, the most supply Virginia has had in more than four years. More new listings are coming onto the market each month, and overall active listings continue to build as a result. Given the pent-up demand that exists in the market, any improvement to mortgage rates coupled with more options from the growing inventory will likely facilitate more sales activity.