Closings Dip While Pending Sales Rise

VIRGINIA BEACH, Va. (February 2023) – During January, the Real Estate Information Network (REIN) Inc. recorded 1,502 settled sales, or closings, of residential real estate in the Hampton Roads region.

That’s the lowest recorded number of monthly settled sales in the region since February 2017. The decline in settled sales isn’t totally unexpected, since January is traditionally one of the slowest months of the year for real estate activity.

However, pending sales for January were up month-over-month from December, which is a good sign, said REIN Board of Directors President Jon McAchran, of AtCoastal Realty.

“Pending sales are often used as a forecasting tool for closings in the coming months. We like to see pending sales numbers increase since they usually represent a closed sale in the next month or two.”

McAchran said he has seen offers and activity increase pretty dramatically from the first half of January into the second half and that he’s not sure the increase is being driven by interest rates alone.

“I think buyers are getting used to the interest rate environment and that the market is starting to heat up due to the lack of inventory,” he said, adding that the spring market typically sees increases month-over-month. “Perhaps we are more in line with a typical pre-pandemic spring market, and if interest rates do decrease, this year’s spring market could gain even more momentum.”

January’s data points from REIN:

• Active residential listings totaled 3,266. That’s down slightly from 3,345 last month, and down year-over-year from 2,536 in Jan. 2022.
• Pending sales stood at 1,942. That’s up by 250 from 1,692 last month, and down by 448 from 2,380 last January.
• Settled sales during the month were 1,502. That’s down from 2,004 month-overmonth and down from 2,321 year-over-year.
• The median sales price (MSP) of homes sold in January was $303,000, down slightly from $306,000 in December, but up from $291,000 year-over-year.
• The Month’s Supply of Inventory (MSI) the month was 1.27. December’s MSI was also 1.27. However, year-over-year the MSI was up significantly from 0.79 in January 2022. MSI is a calculation used to identify how long there would be homes for sale on the market if no new inventory were added.
• Median days on market (DOM) for residential listings was 27 – the highest it has been in over two years. That’s up from 24 last month and 16 year-over-year.
• Residential new construction sold in the MLS during the month was 197. Last month it was 277, and last January it was 268.