Lynchburg-area home sales, prices continue decline

Although the home sales market in the Lynchburg area continues to be slower than in previous years, it may be showing some signs of recovery.

Betty Kain, president of the Lynchburg Association of Realtors, said Thursday that consumer confidence has increased, and potential homebuyers are calling again and making reasonable offers for homes on the market. Other real estate agents across the state made similar observations.

However, an economics consultant pointed out that it is too early to be sure whether the market has reached its bottom and bounced back.

“From my perspective, the market is picking up and there’s a lot more activity going on,” Kain said. “There are a lot of people out looking and making offers.”

Statistics released by the Virginia Association of Realtors show what Kain has seen by experience: As the seasonal real estate market picked up this spring, it did so faster than it did in 2008.

Home sales in the Lynchburg area still have not reached the level where they were last year. In the second quarter of 2009, 517 homes sold, about a 20 percent decrease from the 646 homes that sold in the second quarter of 2008.

The average price was $171,248, 2.3 percent lower than in the second quarter last year.

However, compared to the first quarter of 2009 and other trends, the second quarter showed some improvements.

Real estate sales usually rise from the first quarter to the second as warm weather brings more home shoppers. But this year, the number of sales rose 59 percent and the average price rose 17 percent from the first quarter to the second.

Last year, sales increased only 40 percent and the average price dropped nearly 5 percent from the first quarter to second.

Kain said that there has been an increase in sales of larger, expensive homes, which could explain the increase in average selling price in the second quarter. Last year and early this year, sales had mainly shifted toward smaller homes, data shows.

Kain believes the market has continued strong since the end of the second quarter. “People are looking to get into properties before school starts back, so July is the time (they) go ahead and buy,” she said.

Kain said that potential homebuyers still sometimes offer prices below a home’s asking price, but the gap between the asking price and the offer has not grown.

She said the overall economy is stabilizing, making people more comfortable with buying. “People are sensing their jobs are just a little bit more secure. Plants are beginning to hire, and the stimulus money” has helped save some jobs, Kain said.

Other parts of the state have improved, as well, said real estate agents who spoke in a conference call hosted by the Virginia Association of Realtors on Thursday.

“The most notable change is that the consumer confidence is improving a little bit,” said John Powell, an agent in the greater Richmond area. Powell said that his region’s second quarter sales have also picked up faster this year than they did last year.

Rosemary deButts, an economic and housing consultant, cautioned that the sharp sales increase in the second quarter could be purely seasonal instead of proof of continuing recovery. “It’s a bit too early to say if it’s a strong sign of recovery,” she said.

Bill Gearhart, a real estate agent in the Roanoke area, said that sales have increased there in recent months but that the market is fragile.

“(Interest) rates going up, (or) any slight thing will be able to slow it down,” he said.