Editorial – Home prices soaring, but few to buy

Published 4:29 pm Tuesday, June 13, 2023

Hampton Roads residential real estate values continue to sizzle. 

The median sales price of homes sold in the region reached a record high of $335,000 in May, topping the prior record of $329,000 in May 2022, according to the Real Estate Information Network, the leading provider of real estate data in Hampton Roads.

The MSP, as it’s called in real estate jargon, increased nearly 5% from April to May, reaching a record high of $335,000 for the region.  

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Tight inventory heading into the summer months means values aren’t likely to cool anytime soon.

Many consumers who might otherwise choose to sell their homes appear unwilling to do so, as both home prices and mortgage rates are higher than they have been in recent years, according to Jon McAchran, president of REIN’s Board of Directors. 

“Even with mortgage rates up and the price of homes higher, people are buying,” he said. “If there was more inventory, consumers might be more likely to find the home they need, regardless of the  price.” 

Month’s Supply of Inventory (MSI) is a calculation of how long there would be homes on the  market if no new inventory was added. For May, the number was 1.37. Typically, a market is considered “healthy” if the MSI is between 5.0-7.0 months of supply. Since January 2021, the  highest the MSI has been in Hampton Roads was 1.47 in July 2021.  

“Needless to say, it has been a seller’s market in Hampton Roads for a number of years, and  prices are likely to remain high until inventory increases again,” said McAchran. 

Some other data of interest from REIN: 

  • Active residential listings for May were 3,217, up 1.93% from 3,156 in April but down 6.37% from May 2022.  
  • Pending sales stood at 2,856, down 20.86% from 2,363 in April. Pending sales were also down 8.64% year-over-year from May 2022.  
  • Settled sales during the month were 2,498. That’s up 5.71% from 2,053 in April but down 21.69% year-over-year from 3,190 in May 2022. 
  • Median days on market (DOM) for residential listings was 11, down by one day from 12 in April. In May 2022 the DOM was just eight.  
  • Residential new construction sold during the month was 252, compared to 277 last month and 263 last year.

Normally, we’d say this is a good time to sell your home and cash out on record values. But with such limited inventory, where would you go?