By Marco Santarelli
Virginia’s housing market rebounded strongly in the spring of 2020 after a steep decline. In 2021, the hot housing market continued to be fueled by strong demand, low mortgage rates, and a trend toward working from home. In 2022, there is a decrease in sales activity, owing mostly to increased affordability issues, prolonged low inventory, and a major increase in mortgage rates.
According to the July 2022 Virginia home sales report released by Virginia REALTORS®, there were 11,346 homes sold in Virginia in July 2022. This is nearly 26% fewer than July 2021, the sharpest year-over-year drop in more than seven years. Overall, sales activity has been moderating from last year’s level in Virginia since last fall.
Home prices are still increasing in Virginia. While total sales activity continues to decline significantly, home prices on the market continue to rise. In July, the median sales price in Virginia increased by $25,000, or over 7%, to $385,000. While the statewide inventory of homes in Virginia remains low, active listings are increasing in numerous local housing markets across the state. Approximately half of the state’s counties and cities had more active listings at the end of July compared to the same time last year.
While prices are still rising, evidence implies the uptrend is fading. In most price groups, homes sell for more than the asking price. The forecast is that price growth will moderate as market activity cools. The state’s average sold-to-ask price ratio was 101.2%, down from 102.4% the previous month and 101.8% last July.
According to the national property broker, Redfin, the home prices in the Virginia housing market were up 4.7% year-over-year in August 2022. The number of homes sold fell 20.4% and the number of homes for sale fell 26.2%.
- 41% Homes Sold Above List Price in August.
- 35.6% Homes Sold with Price Drops.
- Sale-to-List Price was 100.3%
- The housing supply is scarce in the Virginia housing market.
- # of Homes for sale were down 26.2 percent year-over-year.
- # of newly listed homes for sale were also down 27.8 percent year-over-year.
- Months of supply is just 1.0 months.
- The median days on market were 22, down by 5 days.
Top 5 Metros in the Virginia housing market with the Fastest Growing Sales Price:
Idylwood, VA (+48.6%): In August 2022, Idylwood home prices were up 48.6% compared to last year, selling for a median price of $590K. On average, homes in Idylwood sell after 36 days on the market compared to 39 days last year. There were 23 homes sold in August this year, down from 27 last year.
Forest, VA (+47.5%): In August 2022, Forest home prices were up 47.5% compared to last year, selling for a median price of $442K. On average, homes in Forest sell after 13 days on the market compared to 50 days last year. There were 26 homes sold in August this year, down from 35 last year.
Lansdowne, VA (+45.1%): In August 2022, Lansdowne home prices were up 45.1% compared to last year, selling for a median price of $755K. On average, homes in Lansdowne sell after 22 days on the market compared to 11 days last year. There were 21 homes sold in August this year, up from 20 last year.
Crozet, VA (+39.5%): In August 2022, Crozet home prices were up 39.5% compared to last year, selling for a median price of $607K. On average, homes in Crozet sell after 8 days on the market compared to 89 days last year. There were 27 homes sold in August this year, down from 44 last year.
Smithfield, VA (+32.7%): In August 2022, Smithfield home prices were up 32.7% compared to last year, selling for a median price of $365K. On average, homes in Smithfield sell after 26 days on the market compared to 34 days last year. There were 29 homes sold in August this year, up from 21 last year.
Virginia Real Estate Appreciation & Forecast 2023
Virginia is currently a seller’s market, with homes selling quickly and for more than they are worth. According to Zillow, the typical home value (or ZHVI) in Virginia is $376,644. Virginia home values have gone up 11% over the past year. Although this is the statewide trend, each city and town is unique, which is why it’s best to consult with a local real estate agent to better understand trends in your area.
Here’s Zillow’s forecast for some of the metro areas in Virginia. Here’s Zillow’s 1-year forecast for some of the metro areas in Virginia. Some of the MSAs of Virginia are predicted to see home price decline between Aug 2022 to Aug 2023. Big Stone Gap, VA home values are forecasted to see the largest drop of 2.6% between August 2022 to August 2023.
Metros in Virginia Where Home Prices Will Decline
- Big Stone Gap, VA home values are forecasted to drop by 2.6 between August 2022 to August 2023.
- Martinsville, VA home values are forecasted to drop 1.8% between August 2022 to August 2023.
- Staunton, VA home values are forecasted to drop 1.0% between August 2022 to August 2023.
- Danville, VA home values are forecasted to drop 0.9% between August 2022 to August 2023.
- Charlottesville, VA home values are forecasted to drop 0.2% between August 2022 to August 2023.
Metros in Virginia Where Home Prices Will Rise
- Lynchburg, VA home values are forecasted to rise 0.9% between August 2022 to August 2023.
- Richmond, VA home values are forecasted to rise 0.8% between August 2022 to August 2023.
- Roanoke, VA home values are forecasted to rise 0.8% between August 2022 to August 2023.
- Winchester, VA home values are forecasted to rise by 0.4 between August 2022 to August 2023.
Metros in Virginia Where Home Prices Will Remain Flat
- Virginia Beach, VA home values are forecasted to remain flat between August 2022 to August 2023.
- Blacksburg, VA home values are forecasted to remain flat between August 2022 to August 2023.
- Harrisonburg, VA home values are forecasted to remain flat between August 2022 to August 2023.
Investing in Virginia real estate is a good idea, especially in Virginia Beach, Richmond, Yorktown, Cape Charles, Madison, and Arlington where there is always a high demand for housing. According to Neighborhoodscout, the Virginia real estate APPRECIATION RATE in the previous 12 months (2021 Q1 – 2022 Q1) was 15.47%. APPRECIATION RATE was 3.0% between 2021 Q4 and 2022 Q1. Prices have risen by 23.43% in the last two years and 161.82% since 2000.
- MEDIAN HOME VALUE: $353,996
- AVERAGE RENT: $1,841 per month
- OWNERS = 65%
- RENTERS = 35%
The Top Ten Virginia Cities Where Home Values Have Appreciated the Most Since 2000
- Yorktown
- Cape Charles
- Paris
- Broad Run
- Arlington
- Quantico
- Madison
- Vienna
- Alexandria
- Brightwood
All-Transactions FHFA House Price Index for Virginia (Quarterly)
- Q2 2022: 642.15
- Q1 2022: 602.02
- Q4 2021: 583.35
- Q3 2021: 569.43
- Q2 2021: 544.40
Virginia Housing Forecast (By Virginia REALTORS)
In 2022, Virginia REALTORS® is forecasting that sales activity will be down by just about a tenth of a percent as compared to last year, due primarily to rising affordability challenges, continued low inventory, and a huge uptick in mortgage rates. Virginia home prices will continue to rise in 2022, though the rate of price growth will slow as demand softens and inventory expands a bit.
The group is forecasting that prices will be up by about 4.1% in 2022, making it a more typical year for price appreciation. New construction is expected to stabilize in 2022 with just a modest increase in the number of new homes built. According to Virginia REALTORS, real estate in Arlington and other parts of Northern Virginia has been in high demand for years, fueled by strong job growth and high household incomes in the metropolitan Washington, D.C. area.
Amazon added fuel to this fire a few years ago, but it is no longer the only factor. Amazon has brought new workers to the region. The company announced that it would ultimately bring 25,000 to the Amazon HQ2 headquarters. Amazon has hired more than 3,000 HQ2 employees and was actively hiring another 2,500 workers. These new Amazon jobs tend to be higher-paying—the average annual salary is $150,000. In April 2022, the median sales price in Arlington County was $645,000. The average single-family detached home sold for over $1.2 million.
In April, the median sales price in 22202, which includes National Landing, was $662,500. The majority of the surrounding region has experienced double-digit price increases. Over the past year, the median price of a home in Arlington and Alexandria has decreased due to a greater proportion of condominium sales than single-family homes. Home prices have risen much faster in neighboring Fairfax and Loudoun counties, where the median prices were up 10.1% and 18.0% year-over-year, respectively, in April.
Source: https://www.noradarealestate.com/blog/virginia-housing-market/