In the Virginia Beach, VA market in May, closings of new homes slid year-over-year, and there were hints of weakening market conditions with a percentage drop steeper than that of April 2016. There was a 55.8% drop in new home closings from a year earlier. This came after a 44.4% drop year-over-year in April.
A total of 1,550 new homes were sold during the 12 months that ended in May, down from 1,666 for the year that ended in April.
Out of all housing closings, new home closings made up 3.5%. This is down from the a year earlier when new home closings accounted for 7.8% of total closings. After a decline in April year-over-year, new and existing home closings stayed level in May.
Pricing and Mortgage Trends
In May, the average price of newly sold homes climbed year-over-year to $342,663 per unit, a 3.0% surge. This gain is higher than the 2.8% bump in April year-over-year.
Along with new home prices, there was an increase year-over-year in the average mortgage size on newly sold homes. It gained 10.4% in May from a year earlier to $321,520. In April 2016, average mortgage size increased 5.4% 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 rose from 74.5% in May 2015 to 84.8% of closings in May 2016. Conversely, the share of new home closings belonging to attached units fell to 15.2% of closings from 25.5% of closings.
The average unit size of newly sold homes sank 10.3% year-over-year to 2,148 square feet in May 2016. This decline was opposite the price surge, a pattern also seen in April 2016 when the average size of newly sold homes slid 8.5% to 2,149 square feet. In April, the average size of new homes sold went from 2,348 square feet a year earlier to 2,149 square feet.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in May, but did not look to be a burden on the market. Out of all existing home closings, foreclosures combined with REO closings represented 23.0% of closings, below 27.3% a year earlier. The percentage of existing home closings involving foreclosures went from 12.5% in May 2015 to 11.7% in May 2016 and REO closings as a percentage of existing home closings sank to 11.4% from 14.8% a year earlier.