In this article, we will analyze the current Virginia housing market trends. The April 2023 Virginia Home Sales Report, released by Virginia REALTORS®, has revealed that the housing market in Virginia experienced its slowest April in over ten years. While the number of homes sold and new listings decreased significantly compared to the previous year, the tight inventory conditions have kept the market competitive and home prices high.
Decrease in Home Sales:
In April, there were 8,252 homes sold in Virginia, marking a 31.2% drop from the previous year. This decline reflects the lowest April market the state has witnessed in over a decade. The decrease in home sales can be attributed to the reluctance of sellers to list their homes in the current housing market across Virginia.
Reduced New Listings:
The report indicates that there were 11,174 new listings added to the market in April statewide, which is 28.5% lower than the previous year. This reduction in new listings exacerbates the already tight inventory conditions in Virginia. Many homeowners who took advantage of the refinance boom in 2020 and 2021 secured low-interest rates, providing little incentive for them to sell their homes and move into a new one with higher rates. Consequently, the limited inventory continues to pose challenges for prospective buyers in the state.
Steady Median Sales Price:
Despite the slowdown in sales, the constrained supply has managed to keep the median sales price in Virginia stable. In April, the median sales price reached $391,000, increasing by $1,000 compared to the previous year. This steady price trend indicates that despite the decrease in sales activity, home prices in Virginia remain relatively high.
Competitive Market and High Home Prices:
The average sold-to-list price ratio in Virginia rose above 100% for the second consecutive month. Homes priced above $800,000 exhibited the highest average sold-to-list price ratio of 102.2%, indicating strong demand in this price segment. On the other hand, homes priced below $200,000 had an average sold-to-list price ratio of 98.2%, the only price segment in Virginia where prices were slightly below the listing price. This data suggests that sellers who price their homes competitively are likely to receive multiple offers, emphasizing the competitive nature of the current housing market in the state.
Continued Demand and Future Outlook:
Virginia REALTORS® Chief Economist Ryan Price believes that the robust demand in the housing market will likely persist throughout the summer. The trend of multiple offers on competitively priced homes is expected to continue due to the strong demand from buyers. However, the constrained supply resulting from fewer new listings poses a challenge for buyers seeking available properties. Homebuyers may face increased competition and the possibility of rising prices in the coming months.
Virginia Real Estate Appreciation & Forecast 2023
Real estate is one of the most significant investments people make in their lifetime. As such, it is essential to stay updated with the trends and forecasts of the industry. The Virginia housing market is showing strong growth and activity, making it an attractive area for homebuyers and sellers. With an average home value of $364,208, the market has experienced a 3.7% increase over the past year, indicating a positive trend for homeowners in the state.
Market Trends
As of March 31, 2023, the median sale-to-list ratio for homes in Virginia is 1.000, reflecting a balanced market where homes are typically selling close to their list price. Moreover, 35.6% of homes sold in Virginia have been sold above the listing price, indicating a competitive environment where buyers are willing to pay more to secure their desired properties. Additionally, 39.0% of homes have been sold under the listing price, providing opportunities for buyers to negotiate and potentially find favorable deals.
Quick Sales and Market Competitiveness
One notable aspect of the Virginia housing market is the speed at which homes go pending. With a median of only 8 days to pending as of April 30, 2023, homes are selling very quickly in the state. This signifies a high demand for housing and a competitive market where buyers need to act swiftly to secure their desired properties.
Housing Forecast for MSAs in Virginia
The Metropolitan Statistical Areas (MSAs) in Virginia exhibit varying trends in the real estate market, with different cities experiencing different rates of growth. Let's take a closer look at the forecast for selected MSAs in Virginia.
Washington, DC MSA: In the Washington, DC MSA, home values are projected to increase steadily. From the base date of April 30, 2023, a growth rate of 0.3% is expected by May 31, 2023. This growth is anticipated to slow down slightly, with a projected growth of 0.1% by July 31, 2023. However, the market is forecasted to pick up momentum and experience a more significant growth rate of 1.5% by April 30, 2024.
Virginia Beach, VA MSA: The Virginia Beach MSA is expected to witness positive growth in its housing market. Starting from the base date of April 30, 2023, the forecast indicates a growth rate of 0.4% by May 31, 2023. The market is expected to continue its upward trend with a growth rate of 0.5% by July 31, 2023. The forecast predicts a more substantial growth rate of 2.9% by April 30, 2024, indicating a favorable outlook for the region.
Richmond, VA MSA: The Richmond MSA shows promising signs of growth in the housing market. With a base date of April 30, 2023, the forecast suggests a growth rate of 0.6% by May 31, 2023. This growth is expected to accelerate further, with a projected growth rate of 1.2% by July 31, 2023. Looking ahead, the market is anticipated to experience robust growth, with a forecasted growth rate of 4.9% by April 30, 2024.
Roanoke, VA MSA: The Roanoke MSA is projected to exhibit a positive trend in its real estate market. Starting from the base date of April 30, 2023, the forecast indicates a growth rate of 0.7% by May 31, 2023. The market is expected to continue its upward trajectory, with a growth rate of 1.5% by July 31, 2023. By April 30, 2024, the forecast suggests a strong growth rate of 5.2%, indicating a favorable outlook for the region.
These are just a few examples of the MSA level forecast for selected areas in Virginia. It's important to note that the real estate market can be influenced by various factors, such as economic conditions, housing supply and demand, and local policies.
Sources:
- https://fred.stlouisfed.org/series/VASTHPI#
- https://www.zillow.com/va/home-values/
- https://www.neighborhoodscout.com/va/real-estate
- https://fred.stlouisfed.org/series/ACTLISCOUVA#
- https://www.redfin.com/state/Virginia/housing-market
- https://virginiarealtors.org/research/reports/home-sales-reports/
