2012 saw signs of recovery for local real estate

The residential real estate market in South Hampton Roads lumbered toward a recovery in 2012, but uncertainty remains for the new year.

The median sale price of existing homes in the region climbed 2.7 percent to $190,000 in 2012 from $185,000 in 2011 after declining steadily since at least 2008, according to figures released Tuesday by the Real Estate Information Network, the Virginia Beach-based multiple-listing service.

The number of units sold in 2012 jumped to 12,102 from 11,465 in 2011 - a 5.6 percent increase.

But the share of foreclosures and shorts sales, collectively known as distressed sales, has been inching upward in South Hampton Roads since August. The percentage of existing home sales that were distressed in December broke the 30 percent threshold for the first time since April.

"In December 2012, we still had 1 in 3 homes sold in distressed sales," said Vinod Agarwal, professor of economics and director of the Economic Forecasting Project at Old Dominion University. "That is still a significant issue for us."

The increase in distressed sales toward the end of the year appears to be seasonal, Agarwal said, but he has no theories about why this occurs.

He isn't sure what to expect for distressed sales in 2013 but said the overall market appears to be much healthier.

"All indications are that our market is moving in the right direction," Agarwal said. "Sales are up, inventory is down, days on market is down, prices have begun to increase."

Ron Foresta Jr., managing broker for the Virginia Beach office of Rose & Womble Realty Co., said activity has picked up in the resale of homes priced less than $250,000 - especially in Chesapeake and Virginia Beach - and he's seen a recent increase in sales of more expensive homes.

Foresta said more first-time home buyers are entering the market on the lower end, which frees up the sellers to buy pricier homes.

Inventory of homes on the market has been dropping, Foresta said, which pushes up prices because there is more competition for homes.

Prices haven't returned to where they were before the housing collapse, but the supply of buyers and sellers is much more stable than it has been, Foresta said. This points to a healthier overall market.

"We can't tell what's coming, but all the numbers are pointing towards a much better environment than they have been for the whole year," Foresta said. "Year over year, just about every measure has improved."

His father, Ron Foresta Sr., president of Rose & Womble's resale division, said defense cuts that will kick in if Congress fails to act by March would have a significant impact on the local real estate market.

In addition to annual figures, REIN released statistics Tuesday for sales in December.

In South Hampton Roads, the number of existing homes sold in December was down 5.2 percent from the same month in 2011 - to 889 from 938.

The median sale price in December of $180,000 was 0.4 percent higher than the median price of $179,250 a year earlier.

Across the region, including the Peninsula, the number of listings dropped in December to 9,613, the seventh consecutive month of declines.

The region's "months of supply" dropped to 5.91, the eighth consecutive month of decreases.

Sarah Kleiner Varble, 757-446-2318, sarah.varble@pilotonline.com

Posted to: Business Realty News Virginia

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