In Virginia an escalating trend is developing as communities closer to Washington, D.C. show growing home sales accompanied by climbing prices, while much of the state still lingers in the housing downturn. But government efforts to keep mortgage interest rates low accompanied by lower home prices are projected to push Virginia’s housing markets higher over the remainder of the year.
Government implemented programs on more than a dozen fronts are acting to increase home sales even with the expiration of the federal home buyers’ tax credit. The trend shows how well paid government workers can strengthen an area’s market even amid a troubled economy.
Outside of the nation’s capitol in Arlington, home prices are climbing slowly as a result of lower priced foreclosures and distress sales. Many homes hitting the market are receiving multiple offers to purchase. A combination of lower prices and near record low interest rates has triggered the surge. The transition from the downturn has been a welcome relief. Housing Predictor now forecasts home prices will appreciate 6.8% for the year in Arlington.
Sales are also increasing in Alexandria, one of the most sought after areas around the Washington, D.C. area. However, higher priced high-end homes are facing more of an obstacle recovering from the downturn in Alexandria, which will encounter a longer road to recovery as a result. More foreclosed properties coming to the market and auction sales should boost prices, however, forecast to inflate on average 5.9% by the end of the year.
A lack of confidence in the housing market, and particularly in the second home vacation market has hurt sales in Virginia Beach, renown for its beach front venues on the Atlantic coastline even though sales improved for a while. But Virginia Beach is the largest metropolitan area in the state, and its traditional housing market should push prices higher overall as home buyers take advantage of lower priced properties. Virginia Beach is now forecast to experience marginal average housing inflation for the year at 2.0%.
In Richmond, once a major regional center for the nation’s banking business, foreclosures are climbing as homeowners lose jobs and walk away from their homes in increasing numbers. The lingering fall out from the financial crisis has hit Richmond hard as more businesses go bust in the economic turmoil.
But bargain hungry investors are moving in to purchase foreclosures as home vacancies rise. Richmond is projected to see a longer road to recovery than most of Virginia in its housing market, which grew beyond its capacity to handle during the bubble, and is forecast to only sustain average housing appreciation of 1.7% in 2010.
In Roanoke, home sales jumped as a result of the federal tax incentive and lower prices, more than tripling over three years ago. But the onslaught of foreclosures hitting the market is troubling as prices move lower. Foreclosures produce more home sales, but at lesser prices. The long haul to a housing recovery should be aided by lower interest rates through the remainder of the year, propping up values. Roanoke is forecast to see average home prices rise a marginal 3.4% by the end of the year.
Increasing home sales will eventually help Norfolk in its housing recovery, but the long road can’t be counted on for help from government workers in the nation’s capitol. Higher unemployment is hurting the local economy, which should see an improvement before years end on projected average housing inflation at a slim 1.7% for 2010.