Three years of strong commercial and residential real estate performance reflect increasing consumer and business confidence across West Virginia and southwest Virginia, according to a comprehensive, three-year report completed by Foxfire Realty.
Commercial real estate sales volume prices at the end of 2016 were up 34 percent over similar sales in 2014, according to the study. Residential real estate sales volume prices increased 18 percent over the same period. About 10,000 properties of all types were sold across the region in 2016, an increase of eight percent over 2015.
Residential sold real estate in 2016 increased almost $216 million over 2014, ending the year at $1,380,149,165. Commercial sold real estate in 2016 increased $10,315,325 over 2014, ending the year at $40,341,382.
“I think people are always surprised to see real estate quoted as a billion dollar industry,” said Richard Grist, owner and broker of Foxfire Realty in Lewisburg.
“We believe the steady growth in commercial and residential real estate sales over the three years is a significant indicator that our market weathered the challenges of the past decade and is positioned for stable, sensible growth into 2017.”
Foxfire specializes in, farms, country estates, recreational land and timberland investment properties.
Grist created the Foxfire Market Report to explore real estate market performance trends. He believes the report is the first to incorporate the two-state region and the first to analyze extensive MLS data. He said the full report will be made public.
The report analyzes three years of information from six major real estate MLS databases in the region. The report breaks out commercial and residential real estate performance from 2014 through the end of 2016 and includes the Greenbrier Valley, the Beckley area, the Charleston-Kanawha Valley, the Mercer-Tazewell region, the Huntington region and the New River Valley.
“The real estate market is an exceptional barometer of how people are feeling about the economy,” said Grist. “Understood across the entire market, when we see performance like this over three years, I think we can be confident the region is building a strong and stable foundation. And, that’s good news for businesses and home buyers and sellers.”
Grist said increasing consumer confidence has brought buyers to the markets who have been sitting on the sidelines.
Among the report’s headlines:
- The number of residential homes sold increased steadily in all MLS areas, indicating a strong demand for home purchases. Days on the market decreased in all but the Beckley and Bluefield-Princeton areas, which were among the hardest hit as coal and natural gas production in the area turned down during the study period.
- Prices of sold homes were relatively flat across the three years and listing prices were steady.
- Commercial real estate was a market driver across the six-MLS analysis with increases in total sold volume prices in most areas. Huntington, Princeton-Bluefield and the New River Valley reported the strongest volume price increases over the three years.
- Homes in the Charleston-Kanawha Valley region sold quickest at about 85 days on the market. Homes in other regions take 115-210 days. The average is 161 for residential and 228 for commercial.
Grist pointed out that an MLS database analysis is not a perfect reflection of the market because some residential and commercial properties never make it into an MLS; they trade privately. However, he added, three years of data provide credible trend lines.
Although timberland transactions are not specifically tracked in the various MLS data, Foxfire Realty specializes in woodlands and the timber industry. Grist believes that U.S. log and lumber exports in 2017 could be the strongest since 2005, a factor that can have significant positive economic impact in West Virginia and southwest Virginia.
Hardwood mills are increasing production, he said, and owners are upgrading mills with new equipment to lower costs and boost yields. U.S. lumber production is pacing an eight-year high and hardwood log exports were up five percent through the end of 2016. Eight hundred million board feet of U.S. hardwood lumber was exported to China, accounting for 52 percent of the 1.66 billion board feet total U.S. hardwood lumber exports in 2016.
“We feel good about the direction of the 2017 commercial and residential real estate market,” said Grist. “With our data analysis in hand, we have the statistics to justify our optimism.”
In 2017, Foxfire intends to analyze monthly the commercial and residential real estate data across the market, looking for trends and early signals of market shifts. The full annual report and the updated monthly results can be found at foxfirenation.com.
The second annual report will be released in January 2018.