New home closings dropped year-over-year in May in the Virginia Beach, VA market, and the percentage decline was steeper than April 2016, giving suggestion the market may be worsening. New home closings saw a fall of 55.8% from the year earlier to 92. This came after a 44.4% fall 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 represented 3.5%. This is a drop 7.8% of closings a year earlier. After declining in April from a year earlier, closings of new and existing homes remained level in May.
Pricing and Mortgage Trends
Average price of newly sold homes had a 3.0% rise year-over-year to $342,663 per unit in May. This lift is higher than the 2.8% bump in April year-over-year.
The average mortgage size on new homes moved north year-over-year along with new home prices. In May 2016, average mortgage size gained 10.4% from a year earlier to $321,520. In April 2016, average mortgage size climbed 5.4% from a year earlier.
Other Market Trends
As a share of new home closings, single-family home closings have climbed from last year while the share belonging to attached units has fallen. The share of new home closings belonging to single-family homes increased from 74.5% in May 2015 to 84.8% of closings in May 2016. Meanwhile, attached units as a percentage of all new home closings slid to 15.2% of closings from 25.5% of closings.
The average unit size of newly sold homes declined 10.3% year-over-year to 2,148 square feet in May 2016. For newly sold homes, an average size fall contrasting with an average price lift was also seen in April 2016 when the average size of newly sold homes dropped 8.5% to 2,149 square feet. The average size of newly sold homes moved from 2,348 square feet in April 2015 to 2,149 square feet in April 2016.
Foreclosures and real estate owned (REO) closings continued to fall from a year earlier in May, but did not appear to be dragging the market. Together, foreclosures plus REO closings represented 23.0% of existing home closings, down from 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.