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Richmond, U.S. Home Sales Rising!
Good news for the Richmond area real estate market! Sales rose more than 32% in October, year over year. 992 homes were sold in October in Central Virginia compared to 749 homes in October of 2008.
Nationwide home sales surged for the second month in a row in October, climbing to the highest level in 2 1/2 years as first-time buyers rushed to take advantage of an expiring tax credit. Home sales nationwide are now up nearly 36 percent from their bottom in January, data Monday showed, though they are still 16 percent below the peak in autumn 2005. At the current sales pace, there is only a 7-month supply of homes on the market.
The National Association of Realtors report that home resales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. It was the biggest monthly increase in a decade.
Without adjusting for seasonal factors, sales were up 21 percent from a year earlier and were up in all four regions of the country. The gains were led a 26 percent increase in the Midwest. Sales were up 25 percent in the Northeast, 23 percent in the South and 10 percent in the West.
The housing recovery is being driven by lower prices combined with federal programs to lower mortgage rates and bring more buyers into the market. The median sales price was $173,100, down 7 percent from a year earlier and off roughly 2 percent from September.
Many experts predict prices will hit a new low next spring, perhaps falling another 5 to 10 percent, as more foreclosures get pushed onto the market. While Central Virginia consistantly out-performs the national average some additional price degradation is possible. The government has tried to counter that trend by offering a tax incentive for first-time buyers and by keeping mortgage rates around 5 percent since the spring.
The tax credit of up to $8,000 for first-time owners was originally set to run out on Nov. 30, but Congress renewed it earlier this month and broadened its reach. People who have owned their current homes for at least five years can now claim a tax credit of up to $6,500 for a home purchase. To qualify, buyers must sign a purchase agreement by April 30. The Realtors’ report on October home sales reflects offers made before buyers knew the tax credit would be extended. Home sales are likely to drop over the winter as buyers hibernate for a few months without the looming tax credit deadline.
The government support can’t last forever. The Federal Reserve is likely to curtail its effort to push down mortgage rates next year. If rates then rise too high, it would make home purchases less affordable and dampen housing demand.
Another concern is that job losses are pushing once creditworthy homeowners into default. Borrowers with prime, fixed-rate loans accounted for one in three new foreclosures in the second quarter, the Mortgage Bankers Association said last week. Nationwide, a record 14 percent of homeowners with a mortgage were either behind on their payments or in foreclosure. And in areas where foreclosures have hit hard, housing remains depressed, despite low prices and mortgage rates and the tax credit.
“It is a great time in Richmond to buy a home whether you are a first time home-buyer or a home owner looking to move up to a larger, nicer or more expensive home” says Skye Bruce, the #1 ranked REMAX Agent in Central Virginia.
Interested in learning more about the Central Virginia real estate market? Skye Bruce Properties has a team of experts to lead you through the maze of buying or selling a home. Contact Skye Bruce Properties today!
