It’s a seller’s world
Residential real estate market runs hot
Sandra Hood finally went on a much-needed vacation in mid-August.
Even so, Hood, the managing broker of Coldwell Banker Traditions in Newport News and president of the Virginia Peninsula Association of Realtors, took advantage of a rainy morning at the beach to open her laptop and get some work done.
“It’s the most difficult market that I have ever been in,” says Hood, who has been in the residential real estate industry for 15 years.
More than 18 months after the COVID-19 pandemic disrupted most industries, real estate agents across Hampton Roads say they are experiencing their busiest year ever, with some running a marathon at nearly a sprinter’s pace to keep up. Despite small signs that segments of the market are cooling, they say they expect the current seller’s market to continue through 2022.
Inventory across Hampton Roads remains tight, forcing an increase in median home sale prices across Hampton Roads to $300,000 — up from $290,000 just two months earlier — proof that demand is still outstripping supply, according to a market summary from Real Estate Information Network Inc. (REIN), the multiple listing service that covers Williamsburg east through Virginia Beach and south across the North Carolina border.
While active listings have increased month-over-month into this summer — 4,220 in June and 4,621 in July — they remain lower than last year, when there were 5,846 and 5,576 homes listed in June and July 2020, respectively. Residential homes spent an average 51 days on the market in June 2020. That dropped to 23 days in June and July 2021, according to REIN.
“This summer, the market has slowed a little bit, and I think most of us are OK with that, because we need the breathing room,” says Jeremy Caleb Johnson, an agent with Long & Foster/Christie’s International Real Estate in Virginia Beach.
Johnson, who serves as vice chair of finance for the Hampton Roads Realtors Association, attributed the cooling to families taking vacations and children heading back to school.
“If I had a really awesome listing, and I put it on the market in March this year, I would [have expected] it to be gone in about 24 to 48 hours,” Johnson notes. “In some instances, we’re seeing putting that same type of awesome, amazing listing on the market today and it’s maybe lasting a week to 10 days.”
Low inventory and high demand may also be fueling buyer fatigue. “I think a lot of buyers have written a lot of offers and didn’t get them, and now they’re like, ‘Maybe now is not the time for us. Let’s sit back and watch the market, see if it goes down at all,’” says Alan Thompson, a co-owner of Chesapeake-based Lucky Homes.
Real estate was deemed an essential industry in Virginia during the pandemic shutdown, which allowed business to keep going. Hood credits the region’s strong job market and military presence for keeping the local residential real estate market so busy. The combination of new people coming to the area and local sellers planning to remain in the area creates another problem.
“You have to be really skilled in making your offers and people could have six, 10 rejections before they finally find a home, and many people are giving up, staying where they are,” Hood says. “People that are moving to the area, they can’t give up. So, it’s a challenge.”
The residential market in Hampton Roads reflects what’s happening in metropolitan regions across the country as COVID-19 reshaped conditions. Sellers are getting offers over list price without having to concede to repairs or inspections, and some buyers are moving farther from offices now that they can work remotely.
Some homeowners took advantage of low interest rates and refinanced, Thompson says, while others who received low bids in previous years are finding luck.
“We’ve reached out to every one of those sellers and said, ‘Hey, if you ever want to sell, now’s the time,’ and they’re selling and selling well,” says Thompson, who also chairs the Hampton Roads Realtors Association’s Resale Council.
As for buyers, some are even purchasing homes sight unseen.
Thompson’s firm worked remotely with a military family last year who could not travel to tour homes because of the pandemic.
“We sold it to them solely by video, which is [nerve-racking] because, basically, we’re picking their house out for them,” he says. “We’ve never met these people at all, so that’s kind of scary.”
Cash also remains king. An Oceanfront home in Virginia Beach built in 2017 went on the market this summer for $5.4 million and sold for $5.8 million to an all-cash buyer, Johnson says. “In every city of Hampton Roads, we are seeing an inordinate number of cash buyers, and that is providing challenges for the stereotypical buyer that has their mortgage.”
While all the above factors are creating a challenging time for Realtors and customers, Thompson says there’s also been an influx of new real estate agents entering the field, lured perhaps by job cuts in other industries and the possibility of quick sales. But in today’s market, he adds, having an experienced agent and lender can make a difference in negotiating and getting to closing. “I think the good agents are doing better because they excel in difficult markets,” he says.
The frenzy and uncertainty of the market has taken a toll on buyers and sellers, and those working in the industry have absorbed some of that impact. Realtors say they’ve relied on supportive colleagues to pitch in when necessary and encourage others to do the same.
“We are constantly being affected by seasonal changes in real estate,” Hood says. “I think that coming into the fall, it’ll probably be a little bit of a slowdown. But I think that the overall state of the real estate economy is going to stay about the same.”