Winchester-Frederick Co., VA Real Estate Market in Review – 2017
The Winchester-Frederick Co., VA real estate market ended 2017 with solid numbers and evidence that the trajectory is continuing up. Every sales number is positive, and the view for 2018 is upbeat and bright. The only negative number in the year in review is the inventory. Inventory as of December 31, 2017 stands at 254 now available homes in the Winchester-Frederick Co., real estate market. That is about 300 below the needed available homes necessary to keep the market healthy.
Winchester-Frederick Co., VA Real Estate Market in Review: Positive Numbers
The average sales price in 2017 was $269,724. That is a 3% increase from 2016. Historically, the 2017 numbers are 14% above 2013, 11% above 2014, and 8% above 2015. Each of the past five years have shown an increase in sales price. The year to year sales percentages have increased 3-5%. The 2016-2017 percentage is slightly smaller than the previous few years growth, but it has also struggled with inventory shortages.
More positive numbers: Days on the market
There are many details that show a real estate market’s health. Price and volume of sales are always a good place to start, but days on the market will show if prices are drawing buyers into the market or if they are limiting buyers.
Prior to the market decline in 2008, many buyers would have been priced out of the market because of the phantom rise in home prices. The thing that kept that from happening on a broad scale was the easy access to lender cash. With no doc loans and lenders scrambling for dollars, questionable buyers were allowed to stay in the market and buy homes they often could not afford or keep. Those buyers were the first wave of foreclosures at the beginning of the recession. At that time, days on the market was not as revealing as it is in a more stable market.
The current average days on the market for 2017 was 60. Over the past five years, that number has stayed consistent with a down movement of 25%. In 2014, the average days on the market reached a five-year high at 80, but it has drifted downward each year since.
A home that has been on the market for 100+ days is telling the seller that something is off. It might be location, price, condition, neighbors, or a market that is simply not moving. The Winchester-Frederick Co., VA is in peril of becoming the market that is not moving. Low inventory can ultimately paralyze a real estate market as quickly as a recession.
Winchester-Frederick Co., VA Real Estate Market in Review: Distressed Properties
Distressed properties are also a market health indicator. This is an area where skittish buyers can enter the market with confidence that the market is healthy and they are likely to see equity appreciation over the average five years of ownership. This is also the area of greatest improvement in the Winchester-Frederick Co., VA real estate market over the past five years.
Local distressed property sales, which are made up of foreclosures (REOs) and short sales, settled into an average of 6% for the year. Throughout the year, a few months saw that number drift to as low as 3%, but the overall average is twice that. Over the past five years, the number of distressed properties has dropped precipitously. The 2013 distressed properties sold in the Winchester-Frederick Co., VA real estate market were 22% of the market. That was followed by 14% in 2014, 13% in 2015, 8% in 2016 and the new low of 6% in 2017.
The continuous drop in distressed properties is one of the most encouraging numbers in the local real estate market. It helps sellers regain lost value in their homes. A street full of foreclosures and short sales affects every house on the street. When neighborhood distressed properties disappear, home values begin to settle back into a true value. The total number of distressed properties in the Winchester-Frederick Co., VA real estate market were 94. When you reflect back to 2013 at 339 with lower overall volume sales, the local market looks a lot better.
Winchester-Frederick Co., VA Real Estate Market in Review: The Only Bad News
There is a great deal of good news in the Winchester-Frederick Co., VA real estate market, but there is one hurdle the market will need to overcome in 2018 if the market is going to reach new highs. Inventory. Inventory is the 800 lb gorilla in the living room.
As mentioned above, inventory is at a decade low. At 254 currently built homes available, the market is struggling to give homes for would-be buyers. Sellers can’t list because there is nowhere to move, and buyers can’t buy because there is nothing to buy. Low inventory could have the local market in a standoff.
If sellers won’t list because of the lack of available properties for them to move to, then buyers have nothing to buy and the circular dilemma continues. That could push buyers into other markets. The Jefferson County, WV market is the fastest growing market in the top of the Shenandoah Valley. Driving buyers and sellers into other markets does nothing to help the Winchester-Frederick Co., VA market.
At some point in the first quarter of 2018, someone has to blink. Even rentals are at a low of 80 available. Sellers who are willing to rent for a year after they sell, have nowhere to move to in the rental market. The inventory issue needs to be addressed early in 2018. If not, the New Year may enter unfamiliar territory in the Winchester-Frederick Co., VA real estate market.