VIRGINIA BEACH
The Hampton Roads real estate market on Thursday got a double dose of good news as it lumbers toward recovery.
The percentage of sales that were either foreclosures or short sales – a segment that’s collectively considered “distressed” – dropped to a three-year low across the region, according to the Real Estate Information Network, a Virginia Beach-based multiple listing service.
And the median price of existing homes sold in South Hampton Roads in June leapt 10.6 percent to $219,500, up from $198,500 in June 2012, according to REIN’s data.
It was the largest year-over-year increase in any month since the market began to recover early last year.
Vinod Agarwal, a professor of economics at Old Dominion University, said he is “cautiously optimistic” that the local recovery is picking up steam but that it’s too early to say whether June’s figures were an anomaly or the start of a trend.
“It’s only one month,” Agarwal said.
The share of distressed sales in Hampton Roads is still significantly higher than it was before 2008, Agarwal said.
The percentage of sales of existing homes that were distressed in June dropped to 22.8 percent – the lowest it has been since June 2010, when it was at 20.8 percent.
“Once it comes down to about 10 percent or below, the effects of distressed sales would become insignificant,” Agarwal said, meaning median prices likely will climb.
Ideally, the share should decrease to 5 percent or below, he said.
Otherwise, the housing market continues to show signs of improvement, Agarwal said.
Median prices were up significantly in June, and sales volume in South Hampton Roads increased about 6 percent year-over-year.
The number of days a home spends on the market dipped to 83 – the lowest level since September 2010.
A statement from REIN said economists partly are attributing a spike in activity to the recent increase in mortgage rates, which spurred some fence-sitters to buy out of fear that rates would climb even higher.
