In the Richmond, VA market in October, closings of new homes slid year-over-year, and the percentage decline worsened from September 2015, indicating the market may be weakening. New home closings saw a 26.8% drop from a year earlier to 145. This came on the heels of a 10.7% decline 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.

Out of all housing closings, new home closings made up 10.0%. This is a fall 12.6% of closings a year earlier. Following a year-over-year increase in September, closings of new and existing homes dropped year-over-year in October.

Pricing and Mortgage Trends

For newly sold homes, the average price slid 2.8% year-over-year in October to $357,933 per unit. This decline is larger than the 1.1% drop in September from a year earlier.

The average mortgage size on newly sold homes sank year-over-year in contrast to the average price of new homes. Average mortgage size dropped by 3.7% from a year earlier, settling at $307,146 in October. In September 2015, average mortgage size jumped 1.4% from a year earlier.

Other Market Trends

The percentage of new home closings belonging to single-family homes has risen from last year while the portion of new home closings belonging to attached units has dropped. The share of new home closings belonging to single-family homes gained from 76.8% in October 2014 to 95.9% of closings in October 2015. Conversely, the share of new home closings belonging to attached units fell to 4.1% of closings from 23.2% of closings.

The average unit size of newly sold homes slid 3.4% year-over-year to 2,703 square feet in October 2015. The average size of newly sold homes moved from 2,728 square feet in September 2014 to 2,630 square feet in September 2015. A decrease in both the average size and price of newly sold homes was also seen in September 2015 when the average size increased 3.6% to 2,630 square feet.

Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in October, but did not appear to be dragging the market. Combined, foreclosures plus REO closings made up 24.3% of existing home closings, below 28.3% a year earlier. The percentage of existing home closings involving foreclosures fell 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.

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