Fauquier housing market reaches highest sales prices since crash
Friday, Aug. 8
A market trend report released by Greater Piedmont Area Association of Realtors (GPAAR) shows a promising upswing for the Fauquier County housing market.
The survey reported the highest inventory of homes for sale for the Piedmont area since 2007.
Higher prices encouraged more homeowners to sell their homes, boosting the inventory of available houses providing eager buyers a better selection. A gradual easing of mortgage underwriting guidelines and interest rates that are continuing to remain low are also attracting more buyers.
“These trends are a good, positive thing for us, for the area and for the local economy,” said Tom Campbell, a real estate agent for Long and Foster and president of GPAAR.
Chuck Cornwell, a real estate agent at Re/MAX Regency in Warrenton said that this data shows a long-delayed recovery.
“We’re continuing through market recovery,” said Cornwell. “Our market went through a lot of turnover and we're finally getting adjustments back to where they should be.”
Cornwell believes that the federal government's policies are holding back the real estate market and that even more growth would be possible with loosened restraints on loans.
“Underwriting guidelines are extremely difficult for many buyers,” he said. “Mortgage insurance fees have become excessive, and higher than I’ve ever seen before. If we could have underwriting guidelines come back to normal, we would see real estate doing even better.”
Cornwell said that the market is cyclical and it is typical to see the federal government come out with “harsh guidelines” after a crash and then ease up slowly. He hopes the market will continue to get better as regulations normalize.
During the second quarter of 2014, the median sales price for all property types in the Piedmont area rose 12 percent year-over-year from $245,000 to $275,000.
Total sales in the Piedmont area were 3.3 percent higher than a year ago. The 67.3 percent spike in sales compared to the first quarter appears to be a rebound from a long and harsh winter.
The ratio of average sale price to original list price in the second quarter was better than previous years. At 95 percent, this quarter’s ratio was the highest it’s been since 2006, which means sellers retained bargaining power and gained equity.
According to the survey, more housing inventory is projected to become available during the rest of the summer, and sellers will have to become more competitive as the market moves towards buyer favor.
Compared to other counties in the Piedmont, Fauquier fared in the mid-range as far as new inventory available compared to last year. Fauquier had a 10.8 percent gain in new listings, while Madison County lead with a 38.6 percent increase. Rappahannock was the only county in GPAAR's range of concern with a decrease in new listings—10.8 percent less than last year.
Cornwell said that the Piedmont area needs more housing inventory. He hopes that the buyer demand will encourage more building.
“Most buyers would like a little more inventory to choose from,” he said. “ Having more inventory will help with supply versus demand.”
Fauquier came in third compared to other Piedmont counties as far as a year-over-year increase in pricing, with a 6.2 percent increase and a median sale price of $345,000. Orange County came in with the highest price increase with a 23.5 percent and a median sale price of $209,950.
Fauquier and the Piedmont area as a whole are faring better than the average national housing market. According to the National Association of Home Builders (NAHB) pending home sales fell 1.1 percent in June, breaking a three month climb in sales. The total national sales figures for the month fell 7.3 percent on a year-over-year basis.
Both Cornwell and Campbell remain optimistic about Piedmont area home sales.
“Buyers are not under water anymore,” said Cornwell. “They have equity and they can make money again. Some sellers are surprised in a good way how much their houses are worth.”
Cornwell said that as a Fannie Mae foreclosure listing agent, he is seeing far fewer listings than usual.
“I used to do about eight to 12 foreclosure listings at any given time and right now I’ve got none on the market,” he said. “Sellers aren’t underwater anymore.”
Campbell said that as the housing market gets invigorated, other industries will follow suit.
“In any real estate transaction there can be about 10 other industries involved,” he said.
Campbell said that prepping homes for sales means hiring companies to install new carpets, new paint, new windows and so on. He also pointed out that now homeowners buy things like new furniture and decorations.
“If we can keep housing going, I think a lot more of the economy can also benefit,” said Campbell.
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