Closings of new homes fell year-over-year in October in the Richmond, VA market, and the percentage decline worsened from September 2015, indicating the market may be weakening. There was a 26.8% fall in new home closings from a year earlier. In comparison, new home closings in the same month last year saw a 10.7% fall year-over-year in September.
A total of 1,768 new homes were sold during the 12 months that ended in October, down from 1,821 for the year that ended in September.
New home closings made up 10.0% of overall housing closings. This is down from the a year earlier when new home closings made up 12.6% of total closings. Following a year-over-year increase in September, closings of new and existing homes sank year-over-year in October.
Pricing and Mortgage Trends
In October, the average price of newly sold homes sank 2.8% year-over-year to $357,933 per unit. This drop is larger than the 1.1% decline in September from a year earlier.
Average mortgage size on new homes declined year-over-year in contrast to new home prices. Average mortgage size declined 3.7% to $307,146 in October from a year earlier. Average mortgage size increased 1.4% in September 2015 from a year earlier.
Other Market Trends
Single-family homes accounted for a greater percentage of new home closings than last year. Single-family home closings jumped from 76.8% of new closings in October 2014 to 95.9% of closings in October 2015. Conversely, the share of new home closings belonging to attached units sank to 4.1% of closings from 23.2% of closings.
There was a 3.4% drop year-over-year in the average unit size of newly sold homes to 2,703 square feet in October 2015. A decrease in both the average size and price of newly sold homes was also seen in September 2015 when the average size gained 3.6% to 2,630 square feet. The average size of newly sold homes moved from 2,728 square feet in September 2014 to 2,630 square feet in September 2015.
Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in October, but did not look to be a burden on the market. Out of all existing home closings, foreclosures combined with REO closings represented 24.3% of closings, below 28.3% a year earlier. The percentage of existing home closings involving foreclosures slid to 13.4% in October from 16.5% a year earlier and REO closings moved from 11.8% of existing home closings in October 2014 to 10.9% in October 2015.