The number of home sales were down in April within the Staunton, Augusta County and Waynesboro areas, but prices are still increasing.
According to a report from Richard Kane, president and broker at Westhills Realtors, the number of sales in April was down about 12% over last year in our area. It also showed a 1.2% decline in supply.
“We are definitely slowing down a tad,” he said in his report.
This “slow down” isn’t really that slow, though.
Prices are still increasing — 8.9% in average sale price and 12.1% in median sale price over last year, Kane said. The 12 month running average over the last year shows an 11.4% increase in average sale price and 9.1% increase in the median sale price, he said.
“The bad news is that interest rates have jumped again to the last week of April being 5.1% but it’s already climbed over that this week alone to 5.3%,” Kane said. “Housing affordability has dropped … less people are able to afford housing. Not a trend we want.”
The average sale price was also down from $334,572 in March to $302,352 in April. April’s pending sales was up 8.8% from March — 273 versus 251 — as average days on market was 25, which was slightly higher than March.
A normal market is considered 90 days. Above 90 days would be considered a buyers market and below would be considered a seller’s market. The low inventory of houses has a direct effect on the days on market, Kane said.
“In May 2020, I first wrote, ‘This is the first time I have seen more pending sales than active listings. I started keeping market statistics in 2008.’ It has continued for a full year, so definitely a trend. Our market is still being controlled by how much inventory is available,” he said.
The market is continuing to see multiple offers, with no inspections while waiving appraisals and much more offers are being made of sight unseen, Kane said.
Inventory is still at low numbers — the area is about 84% from where it needs to be, he said.
“The disturbing trend is that it is remaining so low for so long and deepening,” Kane said. “If there are not homes to sell in inventory, then the market is a tough place to make a living unless you are the listing agent or agency. It is great for sellers, but not if you are trying to replace the former home with a larger one. At that point it becomes ‘Can I afford the spread?'”
Interest rates have also increased to 5.1%, up a half point from March. Increased interest rates may affect affordability. If you payment stays the same, but your interest rate goes up, then what you can borrow for that same amount becomes less, Kane said.
“So far, I haven’t seen much of an effect on the market except for a slight slowing down in prices and sales numbers,” he said. “Normally, there would be an increase of houses for sale or an increase of the number of days on market, but that shift hasn’t happen yet. Time will tell.”
The increase in average sales price has been encouraging, Kane said.
“The caveat is that this is an average of all price ranges, so higher priced sales do drive the numbers up,” he said. “The lower price ranges are escalating more rapidly, and the higher price ranges are not as much, but even a small increment on a higher price home is significant to the overall appreciation rate.”