Settled sales in the Hampton Roads real estate market experienced its largest year-over-year increase for the year in May. Many other statistical categories ended the month with positive movement including the months’ supply of inventory, under contract sales, and the number of active residential listings for sale. Each of these improvements point towards a solid local real estate market in the coming months.

The local months’ supply of inventory dropped on both a year-over-year and a month-to-month basis. Comparing May 2010 to May 2009, the months’ supply of inventory declined by 8.6% while the drop from April 2010 was relatively smaller at 2.2%. The declines were due in large part to the decrease in the number of newly listed residential properties for the month of May, which dropped 3.4% from May 2009 to May 2010. This discrepancy was a drastic change from the two previous months that saw an increase of 21% in April and 31% in March. The slight month-to-month decrease, about 60, in active homes for sale also contributed to the drop in the months’ supply inventory.

Under contract sales maintained its recent year-over-year trend of gains, but the magnitude of those gains was the smallest since February of this year. The under contract sales for residential listings increased 12% when compared to May 2009. The magnitude of this increase was much smaller than the previous two months due in large part to the ending of the federal tax credit that was offered for first-time and select repeat home buyers. The cities with the largest rise in units measured year-over-year for under contract sales were Portsmouth and Norfolk at 33% and 22%, respectively.

The largest highlight for May 2010, was the 22% increase in settled sales when compared to May 2009. All seven major cities experienced a year-over-year increase with Portsmouth leading the way with a 49% leap. Most surprising was the 1% increase in median sales price of homes sold in Virginia Beach from May 2009. Though overall, the median sales price continued to show lower readings when compared to last year, down 2.3% for the month, and seems to be stabilizing for the region.

Distressed sales, homes that are either short sales or bank owned, continued to be a significant factor in the local market, yet not to the level they have played over the previous five months. The number of distressed sales dropped from around 25% of all residential sales each of the first three months this year to 23% in April, and down to 21% in May. Meanwhile, distressed properties maintained nearly 17% of all the active homes for sale. The drop in the percentage of home sales that distressed homes comprised, coupled with the flat level of homes for sale in the distressed category point towards a decline in the overall impact distressed sales will maintain in the coming months.

May 2010 Highlights

Listings

Residential active listings increased, 6.4% year-over-year, to 15,315 (May 2010) from 14,401 (May 2009). On a month-to-month basis, there was a slight 0.4% decrease from April 2010.

Under Contract (Pending) Residential Sales

Total residential under contract sales increased by 12% as compared to May 2009 (1,926 vs. 1,717).

Sales

Total property sales and total residential sales experienced solid growth when compared to May 2009 showing rises of 23% and 22% respectively.

Inventory

There is currently 9.5 months’ inventory of residential homes on the market in the Hampton Roads area, slightly lower from the previous month, and down 8.6% from May last year.

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From the HUD Website:

Speaking to the National Association of Home Builders Spring Board of Directors Meeting, U.S. Housing and Urban Development Secretary Shaun Donovan today announced that the Federal Housing Administration (FHA) will allow homebuyers to apply the Obama Administration’s new $8,000 first-time homebuyer tax credit toward the purchase costs of a FHA-insured home. Donovan said that today’s action will help stabilize the nation’s housing market by stimulating home sales across the country.

The American Recovery and Reinvestment Act of 2009 offers homebuyers a tax credit of up to $8,000 for purchasing their first home. Families can only access this credit after filing their tax returns with the IRS. Today’s announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to "monetize" up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Home buyers using FHA-approved lenders can apply the tax credit to their down payment in excess of 3.5 percent of appraised value or their closing costs, which can help achieve a lower interest rate. To read the FHA’s new mortgagee letter, visit HUD’s website.

"We believe this is a real win for everyone," said Donovan. "Today, the Obama Administration is taking another important step toward accelerating the recovery of the nation’s housing market. Families will now be able to apply their anticipated tax credit toward their home purchase right away. At the same time we are putting safeguards in place to ensure that consumers will be protected from unscrupulous lenders. What we’re doing today will not only help these families to purchase their first home but will present an enormous benefit for communities struggling to deal with an oversupply of housing."

Currently, borrowers applying for an FHA-insured mortgage are required to make a minimum 3.5 percent downpayment on the purchase of their home. Current law does not permit approved lenders to monetize the tax credit to meet the required 3.5 percent minimum down payment, but, under the terms of today’s announcement, lenders can now monetize the tax credit for use as additional down payment, or for other closing costs, which can help achieve a lower interest rate. Buyers financing through state Housing Finance Agencies and certain non-profits will be able to use the tax credit for their downpayments via secondary financing provided by the HFA or non-profit. In addition to the borrower’s own cash investment, FHA allows parents, employers and other governmental entities to contribute towards the downpayment. Today’s action permits the first-time homebuyer’s anticipated tax credit under the Recovery Act to be applied toward the family’s home purchase right away. Unlike seller-funded down-payment assistance, which was a vehicle for abuse, this program will allow homebuyers to shop for the best home price and services using their anticipated tax credit.

To explore financing options for real estate in Hampton Roads or Williamsburg VA  contact: John@MrWilliamsburg.com

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[vodpod id=Groupvideo.2092721&w=425&h=350&fv=]  

Here is is short five minute video From Golfweek and GolfTV that will give you a feel for both Colonial Williamsburg and the multiple award winning Golden Horseshoe Golf Course.

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