Roanoke Valley Market Snapshot Q1 2020
By: Patrick Wilkinson
Posted 4/6/2020
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Here you’ll find in-depth analysis, graphs and data, of residential real estate sales for the Roanoke Valley of Virginia based on data from RVAR. Be sure to see trends in mortgage interest rates at the end. You are welcomed to share this with your friends, and share on Facebook or Twitter (just click share buttons at the top or bottom of the page). Thanks! Patrick
WHAT JUST HAPPENED?
Somebody took a bite out of Q1 2020 and we’re about to make a mess of Q2 2020. No discussion of Q1 2020 would be complete without mentioning what I call “The Great Shut Down” of the U.S. Economy due to “The Virus Crisis”. Most Q1 contracts on homes were locked in and almost closed before the beginning of this nationwide shutdown of businesses, schools, and much of life. So while I am excited about Q1 numbers, they would have been even better if not for the shutdown. The numbers for the 2nd Quarter of 2020 will show the true effect of what has transpired, and it may not be pretty.
But here’s some GOOD news. The economic fundamentals were excellent prior to this forced shut down, so there is a very good chance we can snap back to good economic fundamentals when this storm passes. Also, since there will be much lower consumer spending during the upcoming 2nd quarter (no flights, trips, conventions, etc), I believe there will be tremendous “pent up demand” for housing and all other products and services when this storm passes. It is possible we’ll see a sparking of a housing boom like there hasn’t been in decades. And it is possible this comeback will more than make up for the weakness caused by the shut down. But enough of that, here’s the Roanoke Valley Market Snapshot Q1 2020
Q1 2020 THOUGHTS
There is good reason to be optimistic about the future due to the success of Q1 2020. Sales of Q1 residential homes in the Roanoke Valley were the highest on record in Q1 2020 with a total of 1,227 homes sold (RVAR data to date). 2020 was setting up to be possibly the best year in Roanoke Valley, and U.S. history. Here’s why…. there are WAY fewer homes to choose from and sellers were finally doing great! There are two terms to remember to truly understand why this is imporant.
First, “Active In Range” (or AIR) means number homes that were on the market during that time period. The Q1 AIR has significantly decreased each year since 2011 (bottom of the market), and is at its lowest point right now ever. This is good news for home sellers, and means (up until March 31st) homes were selling quite well.
– In Q1 of 2020 there were 3,439 homes AIR (lower is better!)
– In Q1 of 2019 there were 3,664 homes AIR
– In Q1 of 2011 there were 6,261 homes AIR (dark days of the real estate crash)
And second, “Absorption Rate” which is the rate, expressed in months, at which the entire supply of homes will sell out if no more homes were added to the market. According to an article by NAR “six months’ supply is considered a balanced market.” The Q1 2020 Absorption Rate for the Roanoke Valley was 3.38 months (until all inventory would be sold out).
This means 2020 so far has been an excellent year for home-sellers. But sellers only do well if buyers have access to great loans. Interest rates have come down in the last 3 months, we are still seeing historically low mortgage rates, and excellent loan programs are available to home buyers. Take a look at rates at the end of this post.
1st Quarter – 2020 – HOME SALES (ALL TIME Q1 HIGH!)
– Chart below illustrates Q1 home sales for each year from 2001 to 2020
– Average Q1 home sales during those 20 years equals 941 homes
– Q1 2020 sales (1,227) are higher by 286 homes (30.39% up) over 20-yr Q1 average (941)
– Q1 2020 sales (1,227) are higher by 129 homes (11.74% up) from Q1 2019 (1,098)
1st Quarter – 2019 – AVERAGE PRICE (ALL TIME Q1 HIGH!)
– Chart below illustrates Q1 average sales price for each year from 2001 to 2020.
– Average Q1 home sales price during those 20 years equals $181,241
– Q1 2020 avg price ($235,796) is higher by $54,555 (30.10% up) over 20-yr Q1 avg ($181,241)
– Q1 2020 avg price ($235,796) is higher by $23,566 (11.10% up) from Q1 2019 ($212,230)
1st Quarter – 2019 – AVERAGE DAYS ON MARKET (DOM) (ALL TIME Q1 LOW!)
– Chart below illustrates Q1 average DOM for each year from 2001 to 2020.
– Average Q1 DOM during those 20 years equals 95 days
– Q1 2020 DOM (65) is lower by 30 days (31.57% down) over 20-yr Q1 avg (95)
– Q1 2020 DOM (65) is lower by 27 days (29.34% down) from Q1 2019 (92)
Total RVAR Annual Sales 2000 through end of 2019
– Chart below illustrates annual home sales for each year from 2000 to 2019.
– Average annual home sales during those 20 years equals 4,754 homes
– 2019 sales (5,811) higher by 1,057 homes (22.2% up) over 20 year avg (4,754)
– 2019 sales (5,811) higher by 270 homes (4.9% up) over 2018 sales (5,541)
TODAY’S MORTGAGE RATES** & HISTORY – As of 4/6/2020
According to Bankrate.com the following mortgage interest rates** are available today:
30-Yr Fixed:
3.625% APR (3.693% rate, $300k loan, 20% down, 740+ credit, 0 pts, $1,095/mo payment)
15-Yr Fixed:
3.125% APR (3.246% rate, $300k loan, 20% down, 740+ credit, 0 pts, $1,672/mo payment)
5/1 Adj Rate:
3.375% APR (3.320% rate, $300k loan, 20% down, 740+ credit, 0 pts, $1,061/mo payment)
To see a chart of last 30 year history of mortgage rates: Click Here
Historical charts courtesy of Jamey Roberts at RMH Mortgage.
*The RVAR is the Roanoke Valley Association of Realtors and owns the Roanoke MLS, from which all RVAR housing data was obtained.
** All loans are subject to credit approval. These rates are not an offer of financing. Every home buyer must be approved through a qualified lender. Loan programs and rates subject to change. The Real Estate Group and/or LivingInRoanoke.com, and/or Patrick Wilkinson, is not / are not a lender.
The Roanoke Valley Market Snapshot Q1 2020
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– Patrick Wilkinson, Living In Roanoke