The Virginia Beach, VA market saw a drop in new home closings year-over-year in February, but the percentage decline, which was less than that of January 2016, gave hints that the market may be evening out. There was a 35.5% fall in new home closings from a year earlier. This came on the heels of a 57.0% decline year-over-year in January.

A total of 1,832 new homes were sold during the 12 months that ended in February, down from 1,887 for the year that ended in January.

New home closings represented 5.0% of overall housing closings. This is a fall 8.0% of closings a year earlier. Following a decline in January year-over-year, closings of new and existing homes gained year-over-year in February.

Pricing and Mortgage Trends

The average per-unit price of newly sold homes rose year-over-year to $358,294 in February, up 13.2% from last year. This surge follows a move from $325,911 per unit to $323,485 from January 2015 to January 2016.

The average mortgage size on new homes moved north year-over-year along with new home prices. Average mortgage size climbed 10.7% to $315,178 in February from a year earlier. Average mortgage size increased 1.4% in January 2016 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 grew from 72.9% of new closings in February 2015 to 83.0% of closings in February 2016. Conversely, the share of new home closings belonging to attached units slid to 17.0% of closings from 27.1% of closings.

For all new homes sold, the average unit size dropped 12.7% year-over-year to 1,981 square feet in February 2016. The average size of newly sold homes moved from 2,254 square feet in January 2015 to 2,024 square feet in January 2016.

Foreclosures and real estate owned (REO) closings decreased in February from a year earlier, but remained a drag on the market. Together, foreclosures plus REO closings accounted for 33.7% of existing home closings, down from 37.6% a year earlier. The percentage of existing home closings involving foreclosures went from 18.3% in February 2015 to 17.7% in February 2016 and REO closings as a percentage of existing home closings declined to 16.0% from 19.2% a year earlier.

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