In the first three months of 2022 our total closed sales, land and homes, have totaled $54,086,316, an increase of 8.36%, compared to the $49,911,478 over the same three months of 2021. This year, our first quarter closed sales on waterfront homes are up 9.22% (in dollar sales), compared to the same period last year. We have closed 52 this year compared to 59 last year. The average sold price of waterfront homes in 2022 was $804,546, an increase of 23.92% over the same period in 2021. The median sold price of waterfront homes for the first three months was $727,500 compared to $570,000 in 2021, an increase of 27.63%. The median days on market for waterfront homes for the first quarter was 7. Offshore homes sales (in dollars) have also increased 66.70% this year compared to last year. The average sold price of offshore homes for the first quarter of 2021 was $243,015. The average sold price of offshore homes for the first quarter of 2022 was $243,015 vs. $178,170 for the same period last year, an increase of 36.4%. We closed on 33 offshore homes this year. Waterfront lot sales (in dollars) were down 46.59% from last year. All sales numbers are from the Roanoke Valley Lake Gaston Board of REALTORS® MLS and do not reflect private sales.
Across the country, The National Association of REALTORS® (NAR) reports “Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums and co-ops, sank 7.2% from January to a seasonally adjusted annual rate of 6.02 million in February. Year-over-year, sales decreased 2.4% (6.17 million in February 2021).”
"Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases," said Lawrence Yun, NAR's chief economist. "Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate. “Monthly payments have risen by 28% from one year ago – which interestingly is not a part of the consumer price index – and the market remains swift with multiple offers still being recorded on most properties." The median existing home price for all housing types in February was $357,300, up 15.0% from February 2021 ($310,600).”
"Pending transactions diminished by 5.4% in February mainly due to the low number of homes for sale," said Lawrence Yun, NAR's chief economist. "Buyer demand is still intense, but it's as simple as ‘one cannot buy what is not for sale.'"
Our inventory of quality homes in the Lake Gaston market is also at record lows. A recent blog by the Virginia Association of REALTORS stated available inventory was down 50% from a year ago and 66% from five years ago. I believe our market is no different.
Today, a local lender is quoting 5.875% interest on a 30-year mortgage on second homes. Last April that 30-year rate was 2.875%. It is the first time since February 2011 that thirty-year mortgage rates have reached the 5% mark. Mortgage rates now stand 3 percentage points higher than they were during the popular spring home-buying season in 2021.
As if the 3-point increase in mortgage rates are not enough: effective April 1, 2022, added up-front fees for mortgage loans on second homes will be between 1.125% and 3.875%. Fees will vary based on the loan-to-value ratio. For example: A $300,000-second home mortgage with loan-to-value ratio of 65%, acquired by Fannie Mae or Freddie will pay an extra fee of $4,875. A large percentage of loans are Fannie Mae or Freddie Mac.
The cost of building materials continues to climb. Building materials prices increased 20.4%, year-over-year, and have risen 31.3% since January 2020. Ready-mix concrete has been volatile since mid-2020 and has climbed 8.2%, year-over-year. Gypsum (sheet rock) products prices are up 20.7%, year-over-year. Framing lumber prices have increased 79.5%. Over the last 12-month period the prices of exterior and interior paint increased 30.3% and 21.2%, respectively. Appliances to equip new homes are more expensive and sometimes scarce.
“The annual inflation rate for the United States is 8.5% for the 12 months ended March 2022 — the highest since December 1981 and after rising 7.9% previously, according to U.S. Labor Department”. Inflation costs the average US household almost $300 more a month. “The price of gasoline increased 48.0% in the 12 months ended March compared to the 38.0% annual increase in February, according to the most recent inflation data published April 12, 2022, by the U.S. Labor Department’s Bureau of Labor Statistics”.
Will increased mortgage rates and fees combined with record inflation and gas prices hurt second-home sales here at Lake Gaston? Great question.
If you’ve been thinking of selling your Lake Gaston property, wait no longer! The shortage of inventory has persuaded potential buyers to buy their lake homes sooner. A full-time REALTOR®, who provides written data and gives you a correct value of your home is important.
Barney Watson is Owner / REALTOR of Lake Gaston Real Estate LLC and a Director for the Roanoke Valley Lake Gaston Board of REALTORS®. His cell is 252-532-3274 and website is https://lakegastonrealestate.com/