Buyer’s Market beginning to weaken!

The overall health of the Hampton Roads real estate market is showing strong signs of improvement. With the current inventory levels holding steady and sales continuing to rise.

As with any market, the real estate market utilizes key indexes to judge the health of the market. Based on the indexes know as the "absorption rate", "months' supply" and List Price to Sale Price (lp/sp).

It is widely accepted that a healthy market, where neither the seller nor the buyer have an advantage over the other, has a 6 month supply of inventory.

It is interesting to see the LP/SP comparison. That is how low home sellers are actually accepting (sale price), on average, when compared to their LP (list price).

Virginia Beach has a 7.39 months supply of residential real estate, that is at its current rate of home sales and inventory it will take just over 7 months to sell all the existing homes. The average home sale in Virginia Beach was $277,000 represent just under 3% of the average list price of $286,000.

This also indicates that home sellers have moved their home prices to "rock bottom" leaving little room to negotiate both closing cost and sales price. As the months supply reaches 6 months, we will begin to see sale prices increase slightly along with fewer buyers' concessions accepted.

While it is not generally reported in the MLS, it is understood that many home buyers continue to ask for, and receive closing cost assistance from the seller anywhere from 2 to 4 percent.

Interest rates are low! Most recently rates have dipped to the low 5's, home prices have dropped to "rock bottom" and sellers are still providing some concessions. If you have been sitting on the fence just thinking about purchasing a home the time has come to get off the fence and to call me for a no obligation home buyers consultation.

Sean Schroeder, REALTOR
The Real Estate-XChange
757-839-3954
SeanSchroeder@757realproperty.com