Virginia housing market: Everything you need to know
Virginia is a beautifully scenic state where home prices remain high and competitive — particularly in the areas just outside Washington, D.C. Its homeownership rate is higher than the countrywide average, according to data from Virginia Realtors: As of 2022, around two-thirds (67.4 percent) of Virginia households owned their homes.
Pondering a home sale or purchase in the Old Dominion? Let’s take a closer look at real estate market trends across the state. Here’s everything buyers and sellers need to know about the Virginia housing market.
Virginia housing market overview
The latest numbers in Virginia indicate decreasing sales but rising home prices. Per July 2023 data from Virginia Realtors, home sales dropped nearly 21 percent year-over-year, primarily due to low inventory levels and rising mortgage interest rates. Meanwhile, sellers have enjoyed a 3.9 percent price gain year-over-year, with the statewide median sale price increasing by $15,000.
“The Virginia residential housing market is slower but remains relatively strong, despite a decline in sales,” says Jeremy Johnson, an associate broker with Long & Foster Real Estate in Virginia Beach. “The overall trend at present is related to low available inventory due to the vast number of buyers in the marketplace.”
Virginia housing trends and stats
- Per Virginia Realtors, the state’s median sale price in July was $400,000.
- That’s a 3.9 increase over last year and right on par with the National Association of Realtors’ nationwide median of $406,700.
- Homes took an average of 23 days to sell in July. That’s three days longer than July of last year, but still relatively speedy.
- Inventory remains very tight throughout the state, with just a 1.8-month supply of homes for sale. That’s well short of a balanced market, which requires a 5-to-6-month supply.
- Redfin data shows a sale-to-list ratio of 100.6 percent in the state, meaning homes are typically selling for just over their list price.
- According to CoreLogic’s ClosingCorp, Virginia closing costs average 1.7 percent of the home’s sale price. On a median-priced $400,000 home, that comes to $6,800.
Should you buy or sell in the Virginia housing market?
Similar to many regions across the nation, Virginia continues to experience a real estate market that favors sellers, where demand far outweighs supply, leaving buyers with limited bargaining power. Overall, the scarcity of available homes makes it increasingly challenging for buyers to locate suitable properties.
If you’re a home seller
There’s plenty of good news for Virginia sellers. Median sale prices are rising, buyer demand is high and homes are selling relatively quickly.
“Consider that the average days on the market statewide in July were 23, up only three days from last year,” says Johnson. “Back in the pre-pandemic ‘normal’ market of 2019, the average days on the market in Virginia were 41. With ample buyers in the marketplace and few properties to purchase, sellers definitely have the upper hand.”
Before you put your home on the market, though, it’s vital to have a clear understanding of how much it is worth. Enlist the expertise of a local real estate agent to analyze comparables or comps, meaning properties nearby that are similar to yours. Knowing how much they sold for will provide a more precise perspective on the potential market price your home can achieve.
If you’re a homebuyer
Things don’t look quite as rosy for Virginia buyers. You’re competing in a market where home prices are rising and supply is limited. New listings and active listings have both slipped by around 20 percent since last year. The silver lining here is that the average months of inventory in Virginia have slightly increased by 4.9 percent year-over-year.
“Buyers need to be prepared, ready for a potentially protracted homebuying process and working closely with a Realtor whom they trust and who understands the local market,” says Johnson.
He points to Portsmouth, near Norfolk, as a lower-priced market worth looking into for those on a budget — Redfin data shows the median price for a Portsmouth home is $250,450, well below the statewide median. Northern Virginia towns just across the Potomac River from D.C., however, are likely to be much more pricey. The median in Arlington, for example, is $687,500, and in Alexandria it’s $608,500. Bankrate’s home affordability calculator can help you calculate how much house you can afford. And getting preapproved for a mortgage is also a big budget help, as it shows you in advance how much a lender is likely to loan you.
Virginia housing market predictions
Curious where the Virginia housing market is headed? Virginia Realtors data predicts that market conditions will present challenges heading into the fall. Buyers are confronted with rising prices, diminished purchasing power thanks to mortgage rates reaching a 20-year high, and stiff competition with a limited selection of listings to choose from. But, while there has been speculation regarding the possibility of a nationwide housing market crash, experts do not foresee such an event.
“We are expecting a little bit of a lull in the third quarter, largely because of mortgage interest rates, which recently ticked up again. If and when mortgage rates dip lower, we will see pent-up buyer demand unleashed in the fourth quarter and early 2024,” Johnson says.
Overall, Johnson estimates that the Virginia real estate market will remain relatively strong (compared to other areas of the country) for the foreseeable future “due to its proximity to federal jobs and related industries in Washington, D.C., and robust military employment in Hampton Roads within southeastern Virginia.”
Find a Virginia real estate agent
Buyers and sellers each have their own specific considerations, but they both have a critical common need: collaborating with a skilled local real estate agent. Pro agents can delve deeply into the complexities of market dynamics and have the expertise to secure the most favorable deal, whether you’re in the market to buy or sell. “A buyer or seller’s best resource in any market is to work with a Realtor, who has access to advanced training that allows them to act as an expert guide,” says Johnson.
FAQs
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No. According to the most recent data from Virginia Realtors, the state’s median sale price rose nearly 4 percent from July 2022 to July 2023, from $385,000 to $400,000. Redfin’s data also shows statewide Virginia home prices on the rise.
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Virginia is a seller’s market, with rising median home prices and not nearly enough homes for sale to meet demand. The state had a 1.8-month supply of inventory in July, according to Virginia Realtors, which is significantly less than the 5 or 6 months it would take to achieve a balanced market.
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